GM Recall Debacle — Placing Americans in Danger

by Searcy Denney Scarola Barnhart & Shipley

GM is in a fix.

The National Highway Transportation Safety Administration has ordered them to respond to 107 questions concerning defects in GM cars and trucks. Although GM’s CEO promised transparency in the investigation and provided over 21,000, Congressional leaders believe they are still holding back. That may well be a fair suspicion since GM says they culled the 21,000 documents out of a total collection of 5 million documents. Suspecting a company who has spent decades sitting idly by while Americans charged along highways in dangerously defective automobiles is reason enough, but claiming you promise transparency in an investigation yet produce only around one half a percent of the total available document collection makes one wonder.

Federal safety regulators fined GM $28,000 on April 1st. Let’s face it though, to get to fines equating to the profits shown last year by GM of $3.8 billion, GM can delay for some time. Profits that, by the way, may rightly belong to you and me since it was tax payer dollars that propped up GM; it was creative legal finagling in bankruptcy court that protected the company; and all the while GM knew about defective vehicles on the road.

Yesterday, class actions were filed in Miami and in California in an effort to establish a central location to handle losses suffered by consumers because of repair costs, rental car costs and loss of (diminished) value of GM cars and trucks.

When GM was about to fall like so much dust into automotive history, tax payers saved them. Was that a good move? Probably. America had historically been known as the production car capital and GM was one of the kings in that business. So, America probably made the right decision.

Now, with class action lawsuits, fines and a congressional investigation, GM may be in trouble. Is congress wrong? Excluding the normal grandstanders who would seize a hang nail for a second in the public light, someone must investigate and all we really have is congress to do that.

Are lawsuits wrong? Of course not. People have been duped not only into driving unsafe GM cars they already had, but also into investing in new GM cars – also potentially unsafe.

GM has not come out and told the public to park their GM cars until they can be properly repaired. GM has not offered to pay for rental cars to keep people safe.

In fact, GM has said the parts to fix the cars will not be available until June, July, maybe August. What does that tell us? Even though GM has known for decades about the defects, they had absolutely no intention of disclosing them. If they had intended to tell the public, wouldn’t they have the parts to fix the problems?

It was not until GM got caught with their pants down in a lawsuit in which someone was horribly injured and an expert for the plaintiff figured out the problem that GM finally had to come clean.

Wouldn’t our response have been different if you had heard the new CEO of GM come out and say:

“Mistakes were made by my predecessors. We are immediately recalling the following cars and trucks, with the following years. We have the parts to fix them, but we will reimburse owners for reasonable rental car expenses until we can make all the recall repairs. The workers and people who make up the company called ‘GM’ are proud of the cars we make, but we are unhappy with prior decisions not to disclose defects in our vehicles of which, at least some at GM, have been aware. We stand ready to cooperate with the federal government in any investigation and we intend to earn back the trust of Americans.”

Now that would have been a breath of fresh air and would probably have gone a long way to save some of their collective “trunks”.

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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