General Motors faces criminal investigation over ignition recall
The Justice Department will launch a rare criminal investigation to find out if General Motors broke any laws with its slow response to a defect that prompted a widespread recall. GM's CEO has promised 'an unflinching look' at what happened.
The Justice Department has launched a criminal investigation into whether an ignition defect linked to 13 fatalities was ignored by General Motors for over a decade before it launched a massive recall last month.
On Tuesday, a congressional panel launched its own investigation. Sen. Jay Rockefeller (D) of West Virginia has asked for a Senate investigation, as well.
The probe follows a North American recall of GM vehicles with faulty ignition switches including the Chevrolet Cobalt, Pontiac G5, and Pontiac Pursuit in model years 2005-07 (sold only in Canada); the 2003-07 Saturn Ion; the 2006-07 Chevrolet HHR and Pontiac Solstice; and the 2007 Saturn Sky.
GM says the ignition defect could cause the engine and electrical systems of an affected vehicle to be switched off while the vehicle is in operation. A faulty ignition switch might be knocked out of the “run” position if the vehicle goes off-road or is jarred in some way, said GM, and could mean airbags won’t deploy in a crash.
GM has linked the defect to 31 accidents and 13 fatalities. The company also told the National Highway Traffic Safety Administration that it investigated reports of problems with the ignition switches over the past 10 years but never fixed or replace the parts. It didn't launch the recall of the 1.6 million affected vehicles until last month, and it's that inaction that has sparked the investigations.
The House Energy and Commerce Committee is investigating GM’s handling of consumer complaints related to the ignition problems, as well as the response of the National Transportation Safety Administration, according to a statement released by the panel’s chairman, Rep. Fred Upton (R) of Michigan.
On Monday, GM released a timeline of what had happened.
“The chronology shows that the process employed to examine this phenomenon was not as robust as it should have been,” said Alan Batey, GM’s North America president, in a statement. “Today’s GM is committed to doing business differently and better. We will take an unflinching look at what happened and apply lessons learned here to improve going forward.”
GM stock dropped by 5.15 percent Tuesday, closing at 35.18 per share. GM sales rose by 4 percent in 2013, when it sold more than 9.7 million vehicles worldwide and revenue increased by 2 percent to $155.4 billion, but the company’s 2013 profits of $3.8 billion fell short of the $4.9 billion profit GM reported in the previous year.
GM’s North America recall follows a separate recall launched by the company in China during December, which affected about 1.46 million vehicles built by a partnership of GM and Shanghai General Motors. In that recall, problems involved the vehicles’ fuel oil pump, according to the BBC.