The federal government recently sold its last shares of stock in the reorganized General Motors Corp. But its continued interest in the nation's largest carmaker is substantial, with at least two federal agencies and two congressional committees investigating why it took the company 10 years to recall vehicles with a faulty ignition switch that has been held responsible for 31 crashes, at least 12 deaths and many scary close calls. This blatant failure to follow the law on recalls is wholly unacceptable.
The Justice Department has launched a criminal investigation. The National Highway Traffic Safety Administration (NHTSA) is investigating why GM did not initiate until this year the recall of a defect the company allegedly had been aware since 2004. And the Transportation Department is weighing an investigation of NHTSA itself for failing to demand action after receiving at least 260 complaints about GM vehicles suddenly being switched off while being driven.
The flaw caused the engine, power steering, power brakes and airbags to suddenly shut down while the car was in motion. GM made changes to the design of the ignition switch and ignition key, but did not recall the vehicles - mainly Cobalt sedans - that had the faulty switch and only authorized dealers to replace the switches if a consumer complained.
GM finally got around to a recall of 1.6 million vehicles in January to fix the flaw. Since then it has recalled another 1.5 million vehicles for flaws including faulty airbags.
The company recently announced it is setting aside $300 million to cover the costs of the recalls. But the eventual cost could be much higher. GM has already settled one wrongful death lawsuit and is likely to face others.
Meanwhile, the Justice Department under Eric Holder has already aggressively investigated similar allegations against Toyota for failing until 2009 to notify customers of a risk from jammed accelerators on several models. Last Wednesday Mr. Holder announced that Toyota had settled federal charges for a fine of $1.2 billion, the largest on record.
More is likely to be learned in coming weeks about the reasons GM dodged the law on recalls and why NHTSA failed to demand a recall.
But it is astonishing that Mary Barra, GM's new CEO and a career manager at the automaker who rose through the ranks, says she only learned about the problem at the end of January, two weeks after taking office. If that's the case, there are deep problems with GM's management culture that Mrs. Barra will have to correct as a high priority. In a video address to GM workers she apologized for the failure to act, saying, "Something went wrong with our process in this instance, and terrible things happened," But she promised, "We will be better because of this tragic situation if we seize the opportunity. And I believe we will do just that."
GM customers, Congress and the executive branch should insist on it.
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