GM & NHTSA Under Fire: Federal Investigations, Class Actions, Immunity Questioned and Scope of Massive Recalls Revealed

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Just three months into General Motors CEO Mary Barra’s newly assumed role, the exec faces two congressional probes this week on Capitol Hill as well as a criminal investigation launched by the Department of Justice. (Read Barra’s subcommittee testimony here) During the first quarter of 2014, the massive scope of the company’s defective product line has come to light, with nearly 4.8 million vehicles being recalled in the US and another 1.6 million recalled worldwide – totaling a staggering 6.4 million.

Congressional Probes

Earlier in March, the Committee on Energy and Commerce released the results of their preliminary investigation into GM in a memo, revealing that the company was alerted to the defect as early as 2001, and willingly chose to forgo action or acted insufficiently on at deaths-gmleast 11 known occasions leading up to the 2014 ignition switch recalls. The CEC alleges that GM did not act in accordance with the TREAD Act requiring manufacturers to report and act in conjunction with the NHTSA on all deaths and injuries that may be related to a defect. The penalty for such violations was recently raised to $35 million by the Obama Administration in 2012.

The memo reveals that during November of 2004, GM received their first consumer complaint that a ‘vehicle can be keyed off with knee while driving’, and launched an engineering inquiry. In March of 2005, GM’s top leadership chose to close the inquiry with no action, against the advice of top engineers to implement one of several developed solutions. The main reasons cited for the decision were “lead-time for all solutions is too long,” “tooling cost and piece price are too high,” and “[n]one of the solutions seems to fully counter measure the possibility of the key being turned (ignition turned off) during driving.” It has come out that the price per piece to implement one of their engineer’s solutions would have been approximately $0.57. In July of 2005, a 15-year old girl, Amber Marie Rose of Maryland, was killed in an accident driving a 2005 Chevrolet Cobalt; a special investigation conducted by the NHTSA found that her air bag did not deploy because the key had been turned to the “Accessory” setting.

The Committee has also called on David Friedman, acting director of the NHTSA, to testify as to why the organization did not identify and act on a defect trend that should have reasonably been identified by 2007 in the Chevy Cobalt. (Read Friedman’s testimony to the subcommittee here). Friedman notes that airbag non-deployment in the Cobalts and Ions had been questioned starting with the 2005 crash, but that investigators had been indecisive on the cause of the ‘accessory’ key setting. By 2007, a trend was identified but the NHTSA assessment panel did not feel the cars were overrepresented in non-deployment data and were not clear of the link between the ignition switch and deployment at the time. The Center for Auto Safety has publicly slammed the NHTSA, holding the position that the agency should have initiated an investigation as early as 2003 when 3 deaths were connected to airbag non-deployment in the Saturn Ion. The CAC specifically cited two cases of Ford and Voltswagen recalls which were both initiated upon a single complaint.

NHTSA obtained the recall of 250,000 Ford vans for defective dashes that shattered and caused severe facial injuries after receiving a single complaint from a Rockville, Maryland consumer (NHTSA Recall 77V-102). A single complaint from a North Carolina consumer that the steering wheel on her VW Fox came off in her hands led to the recall of 104,000 1987-89 Volkswagens. (NHTSA recall 88V-187.)

Law Firms In Action

Beasley Allen, one of the law firms leading the charge on the impending class action lawsuits, has called it a ‘classic cover up’ and recently filed a 66 page complaint on behalf 1.6 million drivers impacted by the ignition switch defect (Esperanza Ramirez; Judy Murray; et. al. v.  General Motors LLC et. al. 2:2014cv02344. Cali. Ctr. Dist. Ct. 27 March 2014). Another firm Hilliard Munoz Gonzales LLP, which launched the first class action against GM seeking compensation for rapidly decreasing resale values, is also now attempting to break GM’s immunity against wrongful death and other personal injury claims  prior to their 2009 Chapter 11 Bankruptcy. (Jayne Rimer and Doug Weigel et. al. v. General Motors LLC et. al. No. 27-CV-14-4022. Minn.Dist.Ct. 21 March 2014) Hilliard’s position is that ‘New GM’ forfeited its rights to immunity by failure to disclose the known defect in Bankruptcy court. The Beasley Allen firm has called upon GM to set up a settlement fund for personal injury victims regardless of immunity rights on the grounds that ‘New GM’ willingly received bailout funds from the government and is essentially owned by the American people by majority share. Both law firms have earned landmark rulings in cases against Toyota for rapid vehicle acceleration.

Read the Subcommittee on Oversight and Investigations Memo on the GM Defect Timeline here

2014 GM Recall Timeline with Suspected Deaths/Crashes

Date Announced

Est. #

Models

Primary Reason for Recall

Reported Injuries and Fatalities

3/31/14

174046

2013 and 2014 Chevrolet Cruze vehicles equipped with a 1.4L turbo engine, and manufactured between November 28, 2012, and March 7, 2014

If the half shaft fractures and separates while driving, the vehicle would lose power and coast to a stop. If a vehicle with a fractured half shaft is parked without the parking brake applied, the vehicle could move unexpectedly. Either condition increases the risk of a crash.

GM cites ‘several dozen’ warranty reports detailing the defect

3/29/14

490200

2014 Chevrolet Silverado 1500 and GMC Sierra 1500 pickups; 2015 Chevrolet Suburban and Tahoe and GMC Yukon and Yukon XL

Loose fitting on transmission oil cooler lines carry possible risk of oil leaks and may lead to fires

GM cites 8 engine fires

3/27/14

656

2014 Cadillac ELR vehicles not equipped with adaptive cruise control and manufactured September 26, 2013, through February 14, 2014

If the driver is not alerted to an ESC malfunction they may continue driving with a disabled ESC system which may result in loss of directional control, increasing the risk of a crash.

None to date

3/17/14

823788

2008-2010 Chevrolet Cobalt, Saturn Sky, and Pontiac G5 and Solstice, and 2008-2011 Chevrolet HHR with the following service parts: 10392423 (a/k/a ACDelco D1461F), 10392737, 15857948, 15854953, 15896640, and 25846762

Defective ignition switches may have been used as service replacement parts on other vehicles

GM cites 13 deaths; Center for Auto Saftey cites up to 303 based on NHTSA public FARS system

3/17/14

1176407

2008-2013 Buick Enclave and GMC Acadia and 2009-2013 Chevrolet Traverse and 2008-2010 Saturn Outlook

Failure of the side impact air bags and seat belt pretensioners to deploy in a crash increase the risk of injury to the driver and front seat occupant.

None to date

3/17/14

303013

2009-2014 Chevrolet Express and GMC Savana vans manufactured January 27, 2009, through March 7, 2014 with a gross vehicle weight rating of 10,000 pounds and less and equipped with front passenger air bags

In the event of a crash below the air bag deployment threshold, an unbelted front passenger seat occupant has an increased risk of injury.

None to date

3/17/14

63903

2013-2014 Cadillac XTS vehicles manufactured February 14, 2012, through March 7, 2014

The corrosion of the brake booster pump relay connector may cause a resistive short and melt the connector, increasing the risk of a fire.

None to date

2/25/14

748024

2006-2007 Chevrolet HHR and Pontiac Solstice vehicles; 2003-2007 Saturn Ion; 2007 Saturn Sky

In these models, the weight on the key ring and/or road conditions or some other jarring event may cause the ignition switch to move out of the run position, turning off the engine.

GM cites 13 deaths; Center for Auto Saftey cites up to 303 based on NHTSA public FARS system

2/21/14

355

2014 Buick Regal, LaCrosse, Verano, and Enclave, and Chevrolet Impala, Malibu, Cruze, and Traverse, and GMC Acadia vehicles equipped with automatic transmissions

If a vehicle’s shift cable disengages from the transmission shift lever, a driver may be unable to shift gear positions and the indicated shift position may not represent the gear position the vehicle is in.

None to date

2/10/14

619122

2005-2007 Chevrolet Cobalt; 2007 Pontiac G5

NHTSA Initial Reported Recall Reasoning: If the key is not in the run position, the air bags may not deploy if the vehicle is involved in a crash, increasing the risk of injury. Later Reported: They key is able to to unintentionally slip from the “run” to “off” or “accessory” position while the vehicle is being operated causing the sudden loss of engine power, braking and steering.

GM cites 13 deaths; Center for Auto Saftey cites up to 303 based on NHTSA public FARS system

1/13/14

324970

2014 model year Chevrolet Silverados and GMC Sierras equipped with 4.3L or 5.3L engines

The overheated exhaust components may melt nearby plastic parts and may result in an engine fire.

GM cites 3 known fires

 

Topics:  Automobile Recall, General Motors, NHTSA

Published In: Personal Injury Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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