GM'S BIG 180

Reversal on stalling risk forces new look at ignition issues

General Motors CEO Mary Barra and former U.S. Attorney Anton Valukas are sworn in at a congressional hearing last week.

Photo credit: REUTERS
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Ten years ago, General Motors invited federal safety regulators to test drive cars at its proving ground outside Detroit. The goal, according to slides shown that day: "Establish through demonstration and data that an engine stall is not, per se, a safety defect."

Now, in the face of evidence that faulty ignition switches in various small cars contributed to at least 54 crashes and 13 deaths, GM's thinking has fundamentally changed.

"Anytime a vehicle stalls now, we consider it to be a safety issue," CEO Mary Barra assured members of Congress in a hearing last week.

That radical shift in thinking is rippling through GM -- factoring into two recalls this month covering nearly 4 million GM vehicles with ignitions vulnerable to bumpy roads or a driver's knee, and potentially widening the pool of crash victims who could seek compensation.

With its new perspective on the hazards of stalling, GM says it's going through its current lineup and some past models in search of any more problems like the deadly defect in Chevrolet Cobalts and other small cars.

"We're testing almost everything in our portfolio for ignition issues," spokesman Alan Adler said.

GM's reversal could lead to recalls for issues that the company previously might have addressed with a routine service bulletin to dealers.

For years, GM engineers, lawyers and even some executives labeled stalling as no more than an inconvenience, sometimes talking down colleagues who treated it more seriously, former U.S. Attorney Anton Valukas found in his investigation.

"That's just insane, isn't it?" Rep. Diana DeGette, D-Colo., asked Valukas during last week's House Energy and Commerce subcommittee hearing.

"I won't use the word 'insane,'" Valukas replied, "but I'm troubled by that."

Victim compensation


GM's classification of stalling as a safety issue on its own could be significant in defining the very scope of the ignition switch crisis. GM has officially linked 13 crashes to the defective switch, all involving a frontal impact and a lack of airbag deployment caused by the ignition switch slipping out of the "run" position.

But senators, lawyers and safety advocates have argued that the criteria for fixing the death toll should be broader, given the hazards of a vehicle suddenly stalling in traffic, whether or not the airbags are involved.

Barra's testimony signaled that GM is prepared to follow that standard, which would vastly expand the pool of crash victims eligible for compensation by taking into account accidents in which the switch played a role, even if airbag failure wasn't a factor.

"We want to capture every single person who suffered serious injury or lost a loved one -- every single one," Barra told lawmakers. "If the ignition switch was part of the issue, we want them in the program. We want to get everybody that's affected."

Barra said determining which victims would be eligible for compensation -- and the amount of relief available -- would be left entirely to Ken Feinberg, an expert in disaster victim compensation whom GM hired to deal with claims tied to the Cobalt switch. She said Feinberg will submit his plan by the end of this month and start taking claims Aug. 1.

2005 complaint ignored


Meanwhile, GM officials have been taking a closer look at the work of Ray DeGiorgio, the engineer fired this month for authorizing the defective Cobalt switch design and a quiet redesign years later that complicated efforts to uncover the problem.

On Monday, June 16, two days before the hearing, GM recalled 3.4 million Chevrolet Impalas and other mid-sized and large sedans whose ignition switches were approved by DeGiorgio. His work is now at issue in about 46 percent of the individual vehicles GM has recalled this year.

Spokesman Adler couldn't say whether GM is specifically investigating any more switches that DeGiorgio oversaw.

GM said it knows of just 23 incidents related to the latest recall, including eight crashes with six minor injuries.

That's far below the threshold created by GM's product investigations department in 2005, which considered 20 to 30 reports of stalling per thousand vehicles over a three-year period as reasonable. That standard would allow as many as 33,600 incidents a year on the 3.4 million Impalas and other cars now being recalled.

But a document released by Congress shows that GM engineers had been alerted to the issue almost nine years earlier, when a colleague asserted that she had found a "serious safety problem" while test driving the Impala in August 2005.

"I'm thinking big recall," the employee, Laura Andres, wrote. "I don't like to imagine a customer driving with their kids in the back seat, on I-75 and hitting a pothole, in rush-hour traffic."

Andres wrote that a technician who examined the car identified the ignition switch design as the problem and told her that similar complaints had been lodged by employees who had driven the upcoming Pontiac Solstice. The report was forwarded to DeGiorgio, who responded that the same switch configuration had been on the Cadillac DeVille since 2000 and there had "never been an issue" with it.

Automotive News identified 12 complaints of DeVilles shutting down in traffic that were submitted to the National Highway Traffic Safety Administration before the date of that e-mail.

GM said the ignition switches used in the Impala and other cars recalled June 16 are "slightly" out-of-spec but that "the ignition system as a whole meets our target specifications." It said testing found that driving over potholes or another "jarring event" could cause a key with a heavy weight attached to rotate the ignition out of position. GM plans to address the issue not by replacing the switches themselves but by giving customers small, plastic inserts to fill most of the slot on their keys where a ring is attached or by replacing any keys that are worn out.

$2 billion cost


GM said its 44 recalls this year will cost about $2 billion. Based on figures in a December 2013 internal presentation related to the Cobalt recall, the key inserts being given out for the June 16 recall would cost about $20.12 apiece to produce and distribute, for a total cost of $68 million.

GM said its remedy for the Impala recall is appropriate to fix the problem and not based on cost. "The ignition parts perform as intended and are very robust and much more resistant to inadvertent movement of the switch from 'run' to 'accessory,'" it said in a statement.

Even as it issues recalls more aggressively in the wake of the Cobalt situation, GM is sometimes drawing a fine line in terms of which vehicles to include. GM elected to not recall about 563,000 minivans, including the Chevrolet Uplander and Pontiac Montana SV6, that contain the same ignition switch as the 2005-09 Buick LaCrosse, which is part of the Impala recall.

Adler said GM tested the minivans' ignitions but didn't find the same key-rotation potential as in the recalled vehicles. NHTSA's Web site lists seven complaints about the minivans stalling and four claiming airbags failed in a crash, though it's unclear whether any of those complaints relate to the ignition.

GM came under fire in February for initially excluding the Ion, Solstice and four other nameplates that use the same ignition switch when it recalled the 2005-07 Cobalt. It expanded the recall twice ultimately to include 2.6 million vehicles from the 2003-11 model years.

Push-button ignitions


Analysts say GM's latest recalls -- as well as two new NHTSA investigations into whether 1.2 million Chrysler vehicles have similar defects -- could force more scrutiny of ignition system vulnerabilities and accelerate the industry's move toward push-button ignitions. The feature is standard or optional on 72 percent of vehicles, more than double its availability five years ago, according to Edmunds.com.

GM said the Chevrolet Camaro, which it recalled June 13 over concerns that the bulky key-and-fob combination can be bumped out of "run," will get a push-button ignition in next year's redesign. Barra has said GM may switch exclusively to push buttons, and during her testimony last week, she described heavy, dangling key chains as a safety concern for more than just GM.

"I have seen incredible things on key chains," Barra said. "I think this is actually an industry issue that we need to look at."

You can reach Nick Bunkley at nbunkley@crain.com. -- Follow Nick on Twitter

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