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The nation's largest auto company and the watchdog agency in charge of vehicle safety are under fire tonight, as critics raise new questions about last month's delayed recall of 1.6 million cars.
Drivers began complaining nearly 10 years ago of ignition problems in some vehicles, including several older models of the Chevy Cobalt and Saturn Ion. The cars would stall, even shut down, and air bags sometimes failed to inflate. The problem has been linked with 13 deaths and 31 crashes.
David Shepardson of The Detroit News covers the auto industry. And he joins me now.
How were these flaws discovered?
DAVID SHEPARDSON, Detroit News:
Well, it took a long time.
It took almost 10 years, but at the beginning of GM's development, this new model, the 2005 Cobalt back in 2004, a GM engineer reported that one of these incidents had happened, that the power had suddenly gone out, there had been a stall.
GM ended up studying it, opted not to recall the vehicles for a number of reasons, issued a bulletin to dealers the next year. But then they started getting a lot of complaints from customers.
How many complaints?
Dozens and dozens. In fact, in the 2005 time frame, they bought back at least a dozen vehicles there consumers who had reported problems. So it's dragged on for a long time. And it's only been recently that the company has decided that this is — needed to be recalled.
Well, they decided not to recall, as you just point, for a number of reasons. What kind of reasons could there be?
Well, auto companies face tons of safety issues all the time. So, not everything is a safety issue. Instead, they opt to send basically a message to dealers, a bulletin, saying, hey, if a customer comes in with this problem, you know, fix it.
But what the law says is, if the company finds that an issue poses an unreasonable risk to driver safety, they have got five days to recall that. That's what the government is now investigating. And GM could have to pay a fine of up to $35 million if they didn't follow the law.
So how did they change their minds? Why was a recall eventually issued even so late?
Well, it took a long time, and there were reports of deaths. You know, so, in fact, in 2005, GM had proposed changing the design of the key to prevent the key from slipping out.
Remember, what is happening is the ignition key, when you went over a bumpy road was in some cases slipping out of position to either the accessory or the off mode.
Because of the design of the key.
It was a — the key head and the ignition switch itself. So, as it bumped, it actually — think of your key chain on your…
Actually switched — it just — it shifted out of position.
And, as a result, sometimes, the car, the steering and the brakes locked up and the air bags didn't deploy. So — but they kept investigating year after year. And it was only in January, after months and months and really years of investigating, that the company ultimately decided to recall them, but only half the vehicles.
It then was two weeks later that, under pressure, because the same potentially faulty part was in other vehicles, that GM boosted the recall from about 800,000 to 1.6 million worldwide.
When you say under pressure, under pressure from safety advocates?
Safety advocates, absolutely.
Safety advocates are pushing Congress, NHTSA, and questioning why the government didn't do more, given that there were all these complaints. And now it looks like the Senate will also hold hearings on this.
Well, let's talk about what the National Traffic — Highway Traffic Safety Administration knew and what they did when they knew what they knew.
Well, they had two reports of deaths that they did look into around 2007.
But the government didn't open a full-blown investigation. They said of these complaints, it's a relatively small number, a few hundred complaints relative to 1.6 million vehicles, six different models. So the government is looking for needles in a haystack. And remember we're talking about over the last, you know, seven years the government probably influenced over 900 recalls, you know, over 50 million cars called back.
So — and this agency is not large. We're only talking about 50 to 60 people looking at the 300, 250 million cars on the roads. So they do have to be selective. But it does raise questions about why they didn't do more.
How does this recall, this — this huge number compare to what we have seen in the past? I remember sitting here talking with you about the Toyota safety recall?
It differs from Toyota in two main reasons.
It is much smaller. Toyota ultimately was over 10 million vehicles worldwide for two pedal problems. And the difference was Toyota's recall affected a lot of vehicles that were still in production, still in dealer showrooms. And so, in 2010, at one point, Toyota…
Which is not true of the other vehicles?
No. These vehicles went out of production about five or six years ago. So the new — the current GM models are completely different as to the ignition.
The Toyota problem had about half the vehicles at one point had to be — they could not sell because they had to figure this problem out. So that's — GM is trying to emphasize this is old GM, this is something that happened in the past, while also explaining why the new GM, the company that emerged from bankruptcy, decided, you know, to act the way they did.
And don't forget, GM apologized, which is pretty rare. And its new CEO, Mary Barra, has vowed to get to the bottom of it, not something that companies typically have to do with a recall.
Did they stop producing — has it ever happened that they stopped producing models in part because they have a problem that they can't fix?
That probably happened more in the '60s and the '70s. Today, models have natural life cycles. And, generally speaking, it's far more expensive to build a whole new model than fix one part.
You mentioned Mary Barra, the new GM CEO. How big a challenge is this for her, just getting on the job?
Oh, it's huge. I mean, she's only been on the job for less than two months.
And, you know, this goes to some of the heart of what every person thinks when they buy a new car. Is the car safe? Are my kids going to be safe driving it around? Can I trust the company to put my safety ahead of their profits?
And so the company is going to face tremendous scrutiny as they look through e-mails and all the records of the employees. And the company is going to have to show or explain what they did and then — and try to assure customers that the safety is the top priority.
The costs could extend far beyond just a fine or a fee.
Well, in the case of Toyota, they have already spent billions of dollars. The fine is never is the issue. It is always the bad publicity.
David Shepardson of The Detroit News, thank you.
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