EOW May 2014

Transatlantic cable

The internal analysis was made public as auto safety experts urged GM to waive the bankruptcy-related legal immunity that protects it from lawsuits arising from accidents before July 2009. Unless the company elects to forgo that defence to prior claims, many potential lawsuits could be precluded, even if a driver or passenger died. Federal regulators, congressional investigators, and the US Justice Department have launched probes into why it took so long for GM to initiate the recalls. As early as 2007, regulators had informed the company of a possible problem with the ignition switch. Now, the disclosure that it had received reports of ignition switch problems dating back to 2001 potentially raises deeper questions about the delay. According to the Free Press , one such report, from 2003, “documented an instance in which the service technician observed a stall while driving” and said the weight of the key chain had worn out the ignition switch. In 2004, an inquiry was not pursued, the company said, “after consideration of the lead time required, cost and e ectiveness [of solutions].” † The Free Press reported that Clarence Ditlow, who runs the Center for Auto Safety, a private watchdog group in Washington, and Joan Claybrook, a former head of NHTSA, on 12 th March sent a letter to Ms Barra asking that the company set up a $1 billion fund “to cover losses of victims and families of safety defects whose claims have been extinguished by the bankruptcy or barred by statutes of repose or limitations.”

Automotive

Investigators want to know why General Motors delayed action for years on complaints about a problematic ignition switch In the job only since 14 th January, General Motors CEO Mary Barra said in March that she personally was leading e orts to address a broad vehicle recall that has mushroomed into GM’s biggest crisis since it came out of bankruptcy in July 2009. The company is recalling Chevrolet Cobalts of the model years 2005 to 2007, Saturn Ions from 2003-2007, and several other cars over concerns about a faulty ignition switch that can disable power steering and impede the deployment of air bags. Defective switches have been linked to 31 crashes involving the GM vehicles, which resulted in 12 deaths. Todd Spangler of the Detroit Free Press reported from Washington that, according to a Free Press review of documents led with the National Highway Tra c Safety Administration (NHTSA), at least ve of those deaths occurred in accidents that happened before GM’s emergence from bankruptcy. Information requested of GM by federal regulators shows that additional analysis done early this year – incorporating reports of ignition switch problems dating back to 2001 – led to the addition of several models to the recall, which now extends to 1.37 million vehicles in the US and 1.6 million worldwide (“Newly Released GM Records Show Ignition Problems Surfaced as Early as 2001,” 13 th March)

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May 2014