How a Watchdog Blew the Lid Off the GM Recall Scandal
Business + Economy

How a Watchdog Blew the Lid Off the GM Recall Scandal

REUTERS/Mark Blinch

The alarm bells first went off at the Center for Auto Safety on Feb. 13, when General Motors announced a recall of more than 780,000 model year 2005-2007 Cobalts and Pontiac G5s with faulty ignition switches.

Those ignition switches were so sensitive that even a slight jostle or heavy key ring could immediately shut down the vehicle’s power steering and brakes and prevent air bags from inflating to protect the driver and front seat passenger in case of a crash.

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What really caught the auto safety watchdog’s eye was GM’s disclosure that six people had died in crashes related to the ignition problem.

“I said, ‘Six deaths? That’s a lot,’” Clarence Ditlow, the long-time executive director of the center, recalled this week. “The average recall doesn’t have a single death let alone six.”

Two weeks later, GM added 842,000 Ion compacts (model years 2003-2007), and Chevrolet HHR SUVs and Pontiac Solstice and Saturn Sky sports cars (2006-2007) to the list of cars being recalled for the ignition switch problem. Now GM was saying the number of fatalities had been revised upward to 12.

By then, Ditlow and his colleagues at the Washington-based auto safety center that had been co-founded by consumer advocate Ralph Nader were on the case. The revelation of GM’s extraordinarily lengthy delay in recalling the faulty cars had the whiff of scandal to it, according to Ditlow, who is no stranger to high-profile auto industry controversies and cover-ups.

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He was involved in the investigation of the 1978 recall of Ford Pintos, whose faulty gas tank design was linked to at least 27 fiery deaths before the company fully owned up to the problem. And he helped probe the May 2000 recall of Ford Explorers, Mercury Mountaineers and Mazda Navajos that had been fitted with Firestone tires that frequently failed as the tread separated.

Now Ditlow and his group are major players in the GM recall investigation. Already they have turned up compelling evidence that the decade-long cover-up of a serious safety hazard contributed to at least 303 car-crash deaths in which air bags failed to deploy. Ditlow promises there will be more revelations.

GM subsequently told safety regulators that it had received reports of the ignition defect as far back as 2001—more than a decade ago—but the company thought it had solved the problem with a design change in 2006.

Moreover, the National Highway Traffic Safety Administration, which regulates the industry, had been aware of fatalities related to the ignition and air bag problems since at least 2007, but did not request a recall, according to a GM time line of events.

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“To us, this recall case ranks right up there with the Ford Pinto scandal,” Ditlow said in an interview with The Fiscal Times. “It’s not the biggest recall ever; it’s not the most deaths ever. But in terms of a scandal and cover-up, it ranks right up there.”

GM’s laggard response in dealing with a highly dangerous defect in six of its models has thrust the company and its new chief executive, Mary T. Barra, into a crisis with huge economic, political and legal implications.

General Motors survived a recession era bankruptcy with the help of the federal government and returned to profitability long before the scandal broke. Now it may face hundreds of millions of dollars or more in costs to repair the 1.6 million recalled vehicles and to cover civil and criminal charges and lawsuits by the families of victims.

Moreover, the recall controversy has prompted investigations by federal regulators, two congressional committees and the Justice Department. During a press conference in Detroit on Tuesday, Barra repeatedly apologized for what had happened and pledged to get to the bottom of the scandal. “Clearly lives have been lost and families are affected, and that is very serious,” she said.

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Meanwhile, the Justice Department announced on Wednesday that Toyota will pay $1.2 billion to settle a criminal probe of its handling of the reports of unintended acceleration in its vehicles and subsequent recalls beginning in 2009. The settlement is the largest criminal penalty imposed on a car company in U.S. history.

This is all grist for Ditlow, 70, the son of a service manager at a Chevrolet dealership in Harrisburg, Pa., who joined the auto safety center shortly after it was founded in 1970 by Nader, the legendary consumer advocate and author of “Unsafe at Any Speed.” With a background in chemical engineering and law, he was an early member of “Nader’s Raiders” who challenged the safety record of U.S. automobile manufacturers and pressed for safety features such as seat belt.

Though it will be a while before investigators know for sure the origins of the GM recall controversy, Ditlow theorizes that the manufacturer knew of the ignition problem back in 2001, when the Saturn was in the pre-production stages, but decided to keep quiet about it until the model was launched.

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“Defects or problems under the pressure of deadline get through, and then they’ll work them out in the first model year,” he said.  “But then when the vehicles hit the road and you start seeing the same problem with the vehicles on the road, then you’re into more conscious decision making.”

“So in the timeframe for 2001 to 2004, it’s all on GM,” he said. “It’s all in that inertia driven by cost considerations, from hating to admit you made a mistake. . . But then when they started getting these death claims coming in, then it’s a different ball game.”

Once the auto safety center began to focus on the GM case, it mined so-called early warning reporting data on defects and complaints about vehicles and special crash investigation reports on the website of the National Highway Transportation Safety Administration, looking for clues to the scope of the problem – and the role that NHTSA might have played.

“And at each step as we uncovered more information, we said let’s go to the next step,” Ditlow said. Ditlow said he was certain that the 12 fatalities reported by GM was just the tip of the iceberg, and that much more could be learned by digging deeper into the available industry data.

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First, they discovered from the early warning data that several dozen death claims associated with the ignition defect had been filed with GM. Then they came across two eye-opening cases – in Maryland and Wisconsin – in which the ignition switch cut off had disarmed the air bags and contributed to the fatalities.  

A 16-year-old girl named Amber Marie Rose was killed in July 2005 crash while driving a 2005 Cobalt when her air bag failed to deploy. And two other women were killed in a similar accident in Wisconsin in October 2006 that also involved a defective 2005 Cobalt.

In March 2007, NHTSA officials brought up the Maryland accident during a meeting with GM representatives in Washington, according to the GM time line, but there is no indication that NHTSA pushed for a full-blown investigation.

“The thing that just strikes me is that at that meeting they had to discuss this issue,” Ditlow said. “And I think what NHTSA said was, ‘We’re not going to open an investigation.’”

To take their investigation to the next level, Ditlow and his colleagues turned to Friedman Research Corporation, which does sophisticated analysis of raw data in NHTSA’s Fatal Analysis Reporting System. Ditlow asked Friedman to review air bag failures from 2003 to 2012 involving the Cobalts and Saturn Ions—the two biggest sellers among the six recalled models.

What Friedman discovered was stunning:  303 people had died in accidents in GM vehicles after the air bags failed to deploy. The review didn’t try to evaluate what caused the crashes, but the findings added to the mounting reports of problems that went unaddressed for years before GM announced it was recalling more than 1.6 million cars worldwide.  

Related: GM’s Ignition Switch Problems: The 6 Models Being Recalled   

For its part, the National Highway Traffic Safety Administration said its own investigations of Cobalt crashes where airbags did not deploy on three separate occasions produced inconclusive results that did not warrant the agency opening a formal investigation.

"In this case, the data available to NHTSA at the time did not contain sufficient evidence of a possible safety defect trend that would warrant the agency opening a formal investigation," the agency said in a statement last week. "New information provided by GM has prompted NHTSA to launch an aggressive investigation into the timing of their recall."

GM also criticized Ditlow’s use of the Fatality Analysis Reporting System. “As knowledgeable observers know, FARS tracks raw data,” GM spokesman Greg Martin told The New York Times. “Without rigorous analysis, it is pure speculation to attempt to draw any meaningful conclusions.”

But Ditlow dismissed that argument in a letter to the NHTSA, noting, “In some instances, single complaints can trigger a recall.”

“It’s just another example of where NHTSA fell down on the job,” he said. “This recall could have and should have been done no later than 2007 if the agency had ordered it.”

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