Lawmaker Accuses GM of “Criminally Deceiving” the Gov’t
Business + Economy

Lawmaker Accuses GM of “Criminally Deceiving” the Gov’t

GM Under Mounting Pressure from Congress and Irate Consumers

REUTERS/Mark Blinch

General Motors is under mounting pressure to acknowledge the full extent of its liability to the victims of scores of fatal crashes involving a defective and highly dangerous ignition switch in six models of GM compact cars.

The embattled car manufacturer has also been urged by a prominent lawmaker to immediately warn the owners of 1.6 million recalled GM cars not to drive them until the faulty ignition switch is repaired.

Sen. Richard Blumenthal (D-CT) on Monday urged Attorney General Eric Holder to immediately intervene to force GM to assume responsibility for the flawed ignition switch, establish a fund to compensate victims and their families, and try to get the recalled cars off the road as soon as possible.

Related: Why GM May Never Pay a Dime in Liability Claims

Last month, GM issued the recall for Chevrolet Cobalts, Pontiac G5s and four other small car models, saying that if the vehicles’ ignition switches were jostled or weighted down by a key ring it could shut off the car’s power and brake system and disable airbags.

GM has told federal regulators that it was alerted to problems with the ignition switch as early as 2001, and the company has acknowledged a link between the faulty ignition switch and at least 12 deaths and 31 crashes. However, an investigation by the Center for Auto Safety found at least 303 car-crash deaths in which air bags failed to deploy in two of the six recalled models.

Because the accidents occurred before General Motors went through a bankruptcy proceeding in 2009, the restructured GM is technically shielded from civil liability for accidents involving their cars that occurred before the bankruptcy.

Related: How a Watchdog Blew the Lid Off the GM Recall Scandal  

“Like many Americans, I was appalled and astonished by GM’s recent admission that it knew of these disabling defects and their disastrous effects well before the 2009 reorganization,” Blumenthal said in a letter to Holder. “Their deliberate concealment caused continuing death and damage and it constituted a fraud on the bankruptcy court that approved its reorganization.”

Blumenthal added that GM had “criminally deceived” the federal government and the public.

A lawyer for plaintiffs in the recall controversy filed suit in federal district court in Corpus Christi, Tex., yesterday seeking to force GM to issue a “park it now” order to owners of the recalled cars to avoid further fatalities.

“At any given moment, an ignition switch in a wide variety of GM or Chevrolet vehicles could fail, killing or maiming countless individuals,” warned the suit brought by Texas attorney Robert Hilliard on behalf of Charles and Grace Silvas, owners of a 2006 Chevrolet Cobalt.

Deadly GM Defect Has Some Consumers ‘Petrified’

The suit says the plaintiffs had lost trust in the GM and Chevrolet brand and sought damages for the loss of the use of their car and their inability to sell it because of the controversy.

A GM spokesman said today that “the vehicles are safe to drive under the conditions we described to our customers.” Mary Barra, General Motors’ CEO, recently told reporters that the cars are safe to drive provided drivers don’t load up their key rings with added weight.

“The technical team has done extensive testing on this and they’ve looked at the specification. And they feel that with the ring, with the key, and nothing else on it, not even the fob, that these vehicles are safe to drive,” she said.

Meanwhile, a coalition of law firms filed suit in U.S. District Court in San Francisco on Monday alleging that GM not only knew that its ignition switches were faulty but that they were made worse by the position of the switch where it is easily bumped.

As a result, GM's replacement of the switches is an "insufficient" remedy and the cars need an additional fix to shield the key or fob from being bumped by the driver, according to the suit.

"Since at least 2005, GM has known that simply replacing the ignition switches on the defective vehicles is not a solution for the potential for the key to inadvertently turn from the “run" to the "accessory/off" position in these vehicles," the lawsuit states.

Related: GM’s Mounting Killer Car Problem

"GM, in our view, is continuing to mislead customers" by standing by faulty ignition switches as the only cause the problem,  Adam Levitt, a director of one of the participating law firms, Grant & Eisenhofer, said in a statement, according to USA Today..

The New York Times reported yesterday that GM and its engineers laid to rest any doubt that a fatal defect existed in hundreds of thousands of its cars nearly five years ago, yet subsequently told the families of accident victims and other customers that it did not have enough evidence of any defect in their cars.

“In one case, G.M. threatened to come after the family of an accident victim for reimbursement of legal fees if the family did not withdraw its lawsuit,” according to the newspaper’s report that was based on interviews, letters and legal documents.

GM issued a statement yesterday saying that “We are conducting an unsparing, comprehensive review of the circumstances leading to the ignition switch recall. As part of that review we are examining previous claims and our response to them. If anything changes as a result of our review, we will promptly bring that to the attention of regulators.”

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