There is little doubt that the current massive recall of 1.6 million vehicles because of a faulty ignition switch that could cause the vehicles to shut off if they are jarred will cost General Motors (GM) dearly. But the worst hit may be to their reputation as the largest U.S. car maker, not just their bottom line.
In addition to scrutiny by the National Highway Traffic Safety Administration (NHTSA) and several committees in the House and Senate, come reports that the Justice Department has begun a preliminary criminal and civil investigation into how GM handled the recall, or quite possibly didn’t handle it.
According to the recall announcement, any sort of jarring, including the use of an extra-heavy key ring, can cause the ignition switch to slip out of position, which could result in cutting off all power to the vehicle. This can cause everything to stop working, which can lead to a major accident. At the same time, it can cause the air bags to fail to deploy. Sp far, the ignition problem has been linked to at least 23 accidents and 13 deaths, although it’s possible some accidents happened that were not linked to that defect at the time. The company seems to have known about the problem for about a decade.
If the NHTSA decides that GM didn’t report the defect or conduct a recall when it knew the cars were defective, it could fine the company as much as $35 million, which would be the largest-ever fine ever by the U.S.
But more important than the fine could be the result of the Justice Department investigation. Led by the U.S. Attorney’s office from the Southern District of New York, the probe will focus on whether the company violated criminal or civil laws when it failed to notify the NHTSA and other regulators about the ignition problem in a timely fashion, as required by law.
Many worry that, while the financial impact of the recall itself is relatively small, the impact to the company’s reputation could be significant. GM has been struggling to reinvent itself in recent years, it appears that many at GM knew about this problem for years, and simply decided to sweep it under the rug, and this could hurt them badly. Some company documents recently uncovered show that numerous engineers and corporate committees have been working to fix the problem since at least 2004, but were unable to until the current recall, which was announced on Feb. 13, with the scope of the recall doubling 12 days later, on Feb. 25.
If you own any of the vehicles involved in this recall, have it inspected and repaired immediately, because the defect is potentially deadly. If you or a loved one has been injured or killed in an accident involving one of these GM vehicles, please contact the experienced Texas Automobile Defect Attorney at Hill Law Firm as soon as possible to protect your rights under the law.