GM’s Newest Recall Covers 52000 SUVS Over Software Flaw – Bloomberg

Posted: Saturday, May 03, 2014

General Motors Co. (GM) is recalling 51,640
sport-utility vehicles to fix software that may not register
correct fuel levels, the latest in a series of safety actions
this year involving about 7 million vehicles.

A flawed engine-control module in some 2014 Buick Enclave,
Chevrolet Traverse and GMC Acadia SUVs may result in empty tanks
or stalled engines that could lead to crashes, according to a
notice posted today on the U.S. National Highway Traffic Safety
Administration’s website. The company will recalibrate the fuel
system free of charge.

The planned fix follows other GM recalls including that of
2.59 million small cars for faulty ignition switches that
allowed keys to slip out of their “on” positions, cutting
engine power and disabling air bags. GM took a $1.3 billion
charge in the quarter ended March 31 to cover recall costs.

Federal safety regulators, Congress and the Justice
are investigating why it took the company more than a
decade to recall some of the vehicles linked to 13 deaths in
accidents. In contrast, it took GM eight days after being
notified of the fuel-gauge software flaw on April 14 to decide
on a recall, according to NHTSA documents.

Last July, NHTSA’s head of defects investigations
complained to GM that the company was “slow to communicate,
slow to act” on recall investigations.

Compensation Talks

In 2005, GM shrugged off complaints about faulty ignition
switches, saying the loss of power steering wasn’t a genuine
safety risk. In 2010, it recalled thousands of cars to address
just that symptom.

In 2011, Mary Barra, who became the automaker’s chief
executive officer in January, was told that regulators were
investigating steering problems with the Saturn Ion. GM didn’t
recall the Ions until March 2014, a day before Barra testified
to the House Energy and Commerce Committee about the unrelated
faulty ignition switches.

Yesterday, GM adviser Kenneth Feinberg began preliminary
talks with a lawyer for accident victims over claims stemming
from the ignition switches. Bob Hilliard, a Texas attorney,
described the conversation as a “settlement meeting” to
discuss compensation for about 300 victims.

GM lawyers also appeared in a Manhattan bankruptcy court to
fight lawsuits seeking compensation for economic losses, saying
the automaker’s government-led bankruptcy in 2009 absolved it of
such responsibility. GM has agreed to address death and injury
claims and hired Feinberg, who ran compensation funds for
victims of the Sept. 11 terrorist attacks and the 2010 BP oil
spill, to advise it on a resolution.

Claims for economic loss can eclipse the cost of
compensating dead or injured car owners. Hilliard, who has
brought a lawsuit seeking economic damages, wants as much as $10
billion so his clients can buy new vehicles.

To contact the reporters on this story:
Dan Hart in Washington at;
Lorraine Woellert in Washington at

To contact the editors responsible for this story:
Andrea Snyder at;
Bernard Kohn at
Bernard Kohn, Jamie Butters


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