GM Recall Prompts Investigations and Legislation, but More Is Needed to Prevent Future Incidents
by Katie Weatherford, 3/28/2014
At least 31 vehicle crashes involving 13 fatalities have been linked to faulty ignition switches in multiple models of General Motors (GM) vehicles, according to the company's website.
GM first announced a recall of three vehicle models containing the defective ignition switches on Feb. 13, and later expanded the recall on Feb. 25 to include four additional models, totaling approximately 1.6 million vehicles worldwide. The ignition switches in the recalled vehicles can unexpectedly slip from the "on" position into the "accessory/off" position, turning the engine off and potentially causing the vehicle to crash. With the vehicle turned off, the air bags will not deploy, significantly increasing the likelihood of the vehicle's passengers being severely injured or killed in a collision.
GM notified the National Highway Traffic Safety Administration (NHTSA), the agency that investigates automobile defects, of the ignition-switch defect on Feb. 7, although some reports indicate that the company knew about the defects for several years before issuing the recall.
However, NHTSA failed to adequately investigate complaints concerning injuries, fatalities, and other property damaged involving GM vehicles. According to the Center for Auto Safety, GM made 51 submissions of consumer complaints to NHTSA's Early Warning Reporting (EWR) system between 2004 and 2012, and a recall should have been issued in 2007, yet NHTSA stated that the reports to the system did not indicate a significant pattern among the complaints to warrant an investigation. Only after the recall has NHTSA initiated its own investigation into the timeliness of GM's actions.
In response to NHTSA's failure, Sen. Richard Blumenthal (D-CT) sent a letter to NHTSA stating, "Since 2003, too many unnecessary deaths have occurred due to known airbag and ignition deficiencies. These accidents were well-documented and logged in NHTSA's complaint database, yet NHTSA has repeatedly stated that the agency did not launch an investigation or direct a recall because of the absence of a critical mass." The letter continues, "The documents I have requested are crucial in understanding why NHTSA failed to initiate a full investigation of the defects and issue a recall earlier."
The Department of Justice (DOJ) has also initiated a criminal investigation into the GM recall. Earlier this month, speaking on an unrelated 2009 safety recall of Toyota vehicles, Attorney General Eric Holder said, “No company is above the law, and we will never tolerate activities like the conduct at issue in [the Toyota] case.” DOJ announced that Toyota has agreed to pay a $1.2 billion financial penalty and agreed to a criminal charge for wire fraud in relation to a major 2009 safety recall. Holder said his "hope and expectation is that this resolution will serve as a model for how to approach future cases involving similarly situated companies."
Even if Holder's assertions hold true in the GM case, the company may escape liability from lawsuits filed by those injured, killed, or who suffered damages as a result of the faulty switches. Under GM's 2009 bankruptcy agreement, the company cannot be held liable for any claims regarding crashes that occurred prior to the restructuring unless GM is found to have known about the defect at the time of the bankruptcy.
On March 24, Blumenthal sent a letter to Holder calling on the DOJ to hold GM accountable for its failure to warn of faulty ignition switches by requiring the company to set up a compensation fund for victims of the vehicle defect. He also requested that the department intervene in any pending civil suits and oppose any attempt by GM to deny responsibility. The letter states, "Their deliberate concealment caused continuing death and damage, and it constituted a fraud on the bankruptcy court that approved its reorganization. It also criminally deceived the United States government and the public."
Congress will also hold hearings on the recall. GM's chief executive, Mary T. Barra, is scheduled to testify on April 1 before the House Energy and Commerce Committee's Subcommittee on Oversight and Investigations. The Senate Commerce Committee will hold its first hearing on the recall the following day.
Blumenthal has also joined with other lawmakers to introduce legislation that would prevent similar incidents from occurring in the future. On March 25, Sens. Blumenthal and Edward Markey (D-MA) introduced a bill, entitled the Early Warning Reporting System Improvement Act, which would require auto manufacturers to notify NHTSA and provide documentation of any claims or lawsuits against the company involving fatal crashes. The bill also calls for improvements to the EWR system, such as linking the system and other publicly accessible safety databases so that all of the information is easy to locate and understand. Additionally, the bill would require NHTSA to make publicly available on the Internet all notices of inspection and investigation activities and any enforcement actions taken.
This bill would improve NHTSA's EWR system and public access to information contained in that database. But to prevent serious and often fatal car crashes like the one's caused by GM's faulty ignition switches, legislation should also impose civil and/or criminal penalties against companies and their chief officers for failure to disclose information of serious risks or imminent danger associated with their products, and those penalties should be significant enough to deter such action. These legislative improvements are essential to ensure that manufacturers aware of dangerous defects in their products have a strong incentive to report the information and promptly address the problem rather than covering it up and putting Americans at risk.
Image by flickr user amslerpix, used under a Creative Commons license.