GM questioning employees in ignition-switch recall probe: sources – Reuters

Posted: Thursday, March 06, 2014

DETROIT (Reuters) – General Motors Co (GM.N) is moving to learn more internally about its handling of the recall of ignition switches linked to 13 deaths, including questioning employees involved in the process from the start, according to two people familiar with the situation.

A team of attorneys investigating the No. 1 U.S. automaker’s recall of more than 1.6 million vehicles were interviewing employees on Wednesday, trying to learn exactly how the company handled the issue when it was first discovered in 2004, said the people, who asked not to be identified.

GM spokesman Greg Martin did not reveal details of the company’s internal probe but pointed to Chief Executive Mary Barra’s letter to employees on Tuesday, in which she said the company would take an “unvarnished” look at how the process was handled.

Barra said in the letter that she was leading a team of senior executives that is directing GM’s response to the recall, as well as, monitoring progress and making adjustments as needed. She stressed that customer satisfaction is paramount in the process.

Also on Tuesday, GM said it received a 27-page list of 107 questions from U.S. safety regulators at the National Highway Traffic Safety Administration about the company’s handling of the recall. NHTSA opened a probe last week into whether GM reacted swiftly enough in its recall. The request directs the Detroit company to respond by April 3.

In its “special order” to GM’s director of product investigations and safety regulations, Carmen Benavides, NHTSA asked for details on the recall, including the names of all GM employees involved in the process from the start. The document was posted online on Wednesday.

“We are a data-driven organization, and we will take whatever action is appropriate based on where our findings lead us,” NHTSA said in a statement on Wednesday.

The safety agency also asked for details of the problem with the ignition switch, any related warranty data, and any lawsuits filed in connection with the issue, including copies of depositions given by company employees.

NHTSA cited a previous comment by North American chief Alan Batey, in which the executive said GM’s process on the issue “was not as robust as it should have been” and asked the company to detail where it fell short.

In a statement on Wednesday, the company said, “As we have previously stated, we are fully cooperating with NHTSA and we welcome the opportunity to help the agency have a full understanding of the facts.”

“In addition to getting NHTSA the information they need, we are doing what we can now to ensure our customers’ safety and peace of mind,” GM added. “We want our customers to know that today’s GM is committed to fixing this problem in a manner that earns their trust.”

GM, which went through a bankruptcy restructuring in 2009, could face a maximum fine of $35 million if it failed to notify NHTSA within five days of a recall after learning of a vehicle safety defect. Last month, the company recalled a total of more than 1.6 million vehicles, mostly in North America.

The company did not say how much the recall would cost. Analysts have said the biggest cost could result from the flurry of lawsuits likely to be triggered by the defect and the company’s actions.

GM’s recall was to correct a condition that may allow the engine and other components, including front airbags, to be unintentionally turned off.

GM previously said the weight on the key ring, road conditions or some other jarring event may cause the ignition switch to move out of the “run” position, turning off the engine and most of the car’s electrical components. GM has recommended that owners use only the ignition key with nothing else on the key ring.

The company said last week that the initial replacement parts will be available in early April.

At a conference outside Detroit about recalls and warranty costs, Neil Skaar, an analyst in GM’s product development quality operations, said the automaker from top executives down is focused on getting the replacement parts to customers as fast as possible.

“Mark Reuss on down are directly involved in making sure we’re all rowing in the same direction,” he said, referring to GM’s global product development chief. Skaar is not involved in the company’s probe of the recall.

He said at the conference that GM dealers cannot sell any new cars that have been recalled and the company was in touch with its dealers to emphasize that any used cars would also be repaired under the recall as required by law before they are sold.

Skaar said industry completion rates for getting cars repaired under recalls are typically in the 70 percent to 80 percent range, but GM achieves better rates than that.

Last month, GM said it was recalling 778,562 Chevrolet Cobalt and Pontiac G5 compact cars from model years 2005 through 2007. Last week, it added 842,103 Saturn Ion compact cars from 2003 through 2007 model years, Chevy HHR midsized vehicles from 2006 and 2007, and the Pontiac Solstice and Saturn Sky sports cars from 2006 and 2007.

Of the cars recalled, 1,367,146 vehicles are in the United States, 235,855 are in Canada, 15,073 are in Mexico and 2,591 were exported outside North America, according to GM.

GM no longer makes any of the affected models.

(Reporting by Ben Klayman in Detroit; Editing by Jonathan Oatis)


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