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GM Recall: Seeking Answers From Valukas Report

June 3, 2014
5 min to read


General Motors Co.'s effort to contain a safety scandal will come to a pivotal juncture as soon as this week, when former U.S. Attorney Anton Valukas releases his report on the matter, reported The Wall Street Journal.


Since February, when GM announced the first recall of vehicles equipped with faulty ignition switches now linked to at least 13 deaths, the company hasn't said who was responsible for most of the crucial decisions since 2001.

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GM hasn't fired anyone in connection with the defect and recall, which has cost the auto maker $1.7 billion. Two low-level engineers involved with the design of the switch are on paid leave. Two senior executives have retired.


Chief Executive Mary Barra declined to answer many of the questions that two congressional panels posed in April about why GM waited nearly a decade to recall vehicles that employees knew were prone to stalling because of an ignition-switch defect. Instead, she said she would wait for the report from Mr. Valukas, chairman of the Chicago law firm Jenner & Block.


After its release, GM is expected to disclose new steps aimed at ensuring that future vehicle-safety issues move more quickly to the attention of top management and directors, adding to changes that Ms. Barra has begun.


Here are some questions waiting to be answered by Mr. Valukas:


Why didn't GM fix ignition switches used in early Chevrolet Cobalts and other compact cars when the problems first surfaced?

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GM has said that some engineers knew of problems with the ignition switch used on the Cobalt, Saturn Ion and Pontiac G5 in 2001. By March 2005, dealers were reporting customer complaints about stalling cars—a symptom of the faulty ignition switch, according to GM documents. The auto maker bought back more than a dozen vehicles.


In September 2005, a GM engineering manager in an email to 16 company employees—including Lori Queen, GM's engineer in charge of developing small vehicles, and Raymond DeGiorgio, who designed the Cobalt switch—said changing the switch would cost 90 cents a vehicle plus $400,000 for production machinery.


Documents disclosed by congressional investigators and GM don't make clear who made the decision not to redesign the switch at that time. GM has said the ignition-switch recalls that were ordered this February and March will cost about $700 million.


Why didn't GM officials recall older vehicles when the design of the faulty ignition switch was changed in 2006, and why were records of the change lost for about a half-dozen years?


Documents show that Mr. DeGiorgio in 2006 asked parts supplier Delphi Automotive PLC to change the design of the ignition switch used on the Cobalt, Ion and other small vehicles without changing the part number. But the company hasn't explained that action or why records of the design change apparently were lost within GM until last year.

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GM and Delphi documents indicate that Mr. DeGiorgio effectively swapped the old switch design for a design Delphi had on file. GM hasn't said why he made the change, and Mr. DeGiorgio hasn't replied to requests for comment.


Mr. DeGiorgio denied ordering a change to the switch design when questioned about it in a deposition last year in a civil action brought by the family of a Georgia woman who died in a crash in which her Cobalt's air bags failed to inflate.


Why didn't GM take action after a 2007 meeting during which federal regulators raised concerns about air bags failing to deploy in a Cobalt crash?


In March 2007, a National Highway Traffic Safety Administration official asked GM personnel about a fatal crash in July 2005 involving a Chevrolet Cobalt. A sensor showed that the car's ignition switch improperly was in the accessory position at the time of the crash and that the air bags didn't deploy.


Why did GM delay notifying regulators from 2010 until early this yearthat it had mounting evidence of a problem with ignition switches and air-bag failures?

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Between 2010 and last October, GM conducted inconclusive internal investigations into why air bags weren't deploying in crashes involving Cobalts and related cars.


GM internal investigator Brian Stouffer in September 2012 asked a company defect manager to assign a team to examine changes on the Cobalt between the 2007 and 2008 model years. Details of the request are unknown. Mr. Stouffer said analysis of vehicles found many cases in which the driver's knee may have contacted the key and turned off the ignition.


The Transportation Department fined GM $35 million for failing to notify the NHTSA of the safety issue in a timely manner, in part citing Mr. Stouffer's email.


"GM engineers knew about the defect. GM investigators knew about the defect. GM lawyers knew about the defect," said NHTSA Acting Administrator David Friedman. "But GM did not act to protect Americans from that defect."


What did Ms. Barra and other senior executives know and when did they know it?

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Ms. Barra has said she didn't learn of the situation with the Cobalt ignition switches until last December. She told lawmakers this April that top company executives usually were isolated from debates about whether to conduct recalls in order not to influence the outcomes.


Congressional investigators have disclosed a 2011 email exchange that shows that Ms. Barra was informed about a widening government investigation of steering complaints involving 2004 through 2007 Saturn Ions. GM has since recalled those cars to correct steering defects. It took three years to enact that recall.


GM hasn't said how high up the chain of command knowledge of the ignition switch problems went.

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