GM Canceled Ignition-Switch Fix in 2005 Due to Costs

[Purveyor]

By Jeff Plungis Mar 31, 2014 12:00 AM ET

March 31 (Bloomberg) -- Bloomberg’s Jeff Green reports on new documents showing concerns over the cost of a recall to fix ignition-switch problems in General Motors’ vehicles on Bloomberg Television’s “Bloomberg Surveillance.”

General Motors Co., after months of studying ignition-switch failures in the Chevrolet Cobalt, canceled a proposed fix in 2005, when a project engineering manager cited high tooling costs and piece prices, according to documents obtained by U.S. congressional investigators.

A separate opportunity to address the defect was passed over by the National Highway Traffic Safety Administration in 2007, when it opted not to open a formal defect investigation even after an agency official had said a probe was justified, according to an interview between current NHTSA officials and staff members of the House Energy and Commerce Committee.

Those decisions and this year’s recall of 2.6 million small cars for faulty ignition switches are set to be the main focus of congressional hearings tomorrow and April 2. GM Chief Executive Officer Mary Barra and acting NHTSA Administrator David Friedman are being asked to explain the handling of years of complaints about stalling cars and disabled air bags that have now been linked to the switches and tied to 13 deaths.

GM opened an engineering inquiry about the Cobalt ignition switch in November 2004, after customers complained the engine “can be keyed off with knee while driving,” according to a problem-tracking system document obtained by House investigators. Four months later, the Cobalt project engineering manager rejected a key slot change, citing cost and long lead times.

more...

http://www.bloomberg.com/news/2014-03-30/u-s-agency-considered-opening-gm-defect-probe-in-2007.html

[FarCenter]

1. GM was for decades an accounting and marketing company -- not an engineering firm.

[Purveyor]

2. Waiting to see how big a hit their sales are going to take due to this and

the new recalls.

Disappointing, indeed.

[FarCenter]

3. I've read that dealers are encouraging owners to trade up to a new car

This is being regarded as an opportunity to get owners of these mostly over 5 year old cars to trade in and trade up. A $2005 Cobalt is worth around $4000, so even if the recall reduces value some, the dealers can wholesale the old ones without much penalty.

And they know that these customers are an easy mark. They were dumb enough to buy one of the recalled models in the first place!