General Motors: The Scandal and Shame


57 cent part

by Gary Spina

General Motors has recalled 2.6 million small cars with a faulty ignition switch design linked to 13 deaths as the switch moves from “run” to “accessory” or “off” causing the vehicle to stall in traffic, disabling the power steering, power brakes, and air bags.

Two days of testimony last week before the House Energy and Commerce Committee and the Senate Commerce, Science and Transportation Subcommittee revealed the switch cost 57 cents to repair, but General Motors waited ten years to recall six models with the defect.


General Motors CEO Mary Barra testifies on Capitol Hill in Washington, Wednesday, April 2, 2014, before the Senate Commerce, Science and Transportation subcommittee. (AP Photo/Pablo Martinez Monsivais)

General Motors CEO Mary Barra testified that GM knew as far back as 2002 that the ignition switch was of sub-standard design on their Chevrolet Cobalt, Chevrolet HHR, Pontiac G5, Pontiac Solstice, Saturn Ion, and Saturn Sky. Barra has been General Motors CEO only since January 15, 2014, succeeding Dan Akerson who resigned citing the illness of his wife who has been diagnosed with stage 4 lung cancer.

Barra testified that to the best of her knowledge, Akerson was not aware of the design flaw, and that she herself first heard there was a problem on January 31, when GM senior management was apprised of the initial recall of Chevrolet, Saturn, and Pontiac vehicles.

Federal regulators were also aware of complaints involving the ignition switch prior to the federal bailout and bankruptcy of General Motors, and declined on two separate occasions to open formal probes.

The National Highway Traffic Safety Administration released a statement saying it had “reviewed data from a number of sources in 2007, but the data we had available at the time did not warrant a formal investigation.”

The 57 cent cost to replace the switch does not include the labor cost to install a new part. The cost to the automaker would have been about $100 million in 2005, Barra testified, compared with the substantially higher cost now.

She said GM’s decision in 2005 not to make the repair because of cost was “disturbing” and unacceptable, adding that such cost considerations represent the old General Motors. “That is not how GM does business (today),” she said. “I think we in the past had more of a cost culture,” she said, and assured Congress that the automaker is moving toward a more “customer-focused culture.”

Throughout the hearing, lawmakers asked pointed questions as Barra tried to explain why GM would use a switch they knew did not meet their specifications.

When she attempted to demonstrate that such manufacturing decisions were not unusual, she drew a distinction between parts that did not meet GM specifications and parts that were defective and dangerous.

Representative Joe Barton (R-Tx) bristled. “What you just answered is gobbledygook!” he railed.

Barra repeatedly referred to the automaker as the “new General Motors” and promised GM would be “fully transparent” and “will not shirk from our responsibilities now and in the future.”

She said: “Today’s GM will do the right thing. That begins with my sincere apologies to everyone who has been affected by this recall – especially to the families and friends of those who lost their lives or were injured. I am deeply sorry.”