GM Risked Lives to Save 25 Cents Per Car
Business + Economy

GM Risked Lives to Save 25 Cents Per Car

REUTERS/Mario Anzuoni

Until now, one of the most perplexing questions in the General Motors scandal is why the storied manufacturer waited more than a decade to recall 1.6 million compact cars with faulty ignition switches that contributed to more than a dozen deaths across the country.

GM CEO Mary T. Barra testified to members of Congress two weeks ago that while she couldn’t answer that or other troubling questions with certainty, an internal company investigation headed by former federal prosecutor Anton Valukas would get to the bottom of that.

Related: GM CEO Says She Doesn’t Know Why It Took So Long to Fix the Ignition   

Yet, on Wednesday, two prominent highway safety advocates charged that GM in 2001 intentionally chose an inferior design for an ignition switch that it installed in Chevrolet Cobalts, Saturn Ions and other compact cars that the company now concedes contributed to at least 31 crashes and 13 fatalities – many of them involving young people.

The failure of airbags to deploy in many of those accidents has been linked to a serious defect in the ignition switch. 

Company officials’ decision to reject the safer ignition switch back then was motivated by cost, according to Clarence Ditlow, executive director of the Center for Auto Safety, and Joan Claybrook, former administrator of the National Highway Traffic Safety Administration (NHTSA) and former executive director of Public Citizen, a nonprofit consumer advocacy organization.

Exactly how much did the company save by opting for the inferior design? About 25 cents per ignition switch assembly, according to Ditlow.

Ditlow and Claybrook said in a joint letter to Barra that GM documents show that the superior design rejected in 2001 was the same one that the car company quietly began providing years later, in 2006, as a replacement part. GM kept that move secret from the public and federal highway safety regulators by continuing to use the serial number of the original ignition switch on the new switches.

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

“The conclusion we draw from examining the two different designs of the ignition switches under consideration in 2001 is that General Motors picked a smaller and cheaper ignition switch that cost consumers their lives and saved General Motors money,” the letter stated. 

The question of whether to address the faulty ignition switch came up again in 2005, the same year that a 16-year-old girl named Amber Marie Rose was killed in a crash in Maryland while driving a 2005 Cobalt when her air bag failed to deploy. GM decided not to change the faulty ignition switch because by then it would have added about a dollar to the cost of each car, according to an internal GM document provided to congressional investigators. 

The following year, 2006, GM engineers and officials finally decided to change the design. That year, two other women were killed in an accident in Wisconsin that was similar to the tragedy in Maryland that also involved a defective 2005 Cobalt. GM did not have to come up with a new, safer design for the ignition switch assembly because it could simply dust off the design it had rejected in 2001. 

“It was cost over safety,” Ditlow said in an interview yesterday. “GM made a decision in 2001 to pick the cheaper part over the safer part at a cost savings of no more than 25 cents and that decision then cost the consumers’ untold numbers of lives over the years. Basically GM was saying that consumers’ lives weren’t worth 25 cents.” 

General Motors yesterday declined to respond directly to the letter and charges from Ditlow and Claybrook. “All of these questions involve issues the Valukas investigation will address,” said Greg Martin, a company spokesman. “We are hoping that Mr. Valukas’ findings will be completed within the next 45-60 days.”  

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

Barra and GM have been on crisis footing for the past several months as they try to respond to the avalanche of controversy over their mishandling and cover-up of the lethal problem. 

In the process, the company has gradually ratcheted up the number of cars being recalled worldwide, sought to placate outraged families of the victims of the car crashes, and suspended two engineers (with pay) who were implicated in possible wrongdoing. The controversy has triggered investigations by the Justice Department, the National Highway Transportation Safety Administration and Congress. Barra spent the better part of two days testifying before House and Senate panels early this month – and in the process may have angered lawmakers more than allayed their concerns. 

While repeatedly stressing that the mistakes and possible misdeeds were done by officials of the “old GM” that operated before the company emerged from federal bankruptcy in July 2009, Barra acknowledged that the “new GM” has civil and legal responsibilities.  “We are thinking through exactly what those responsibilities are,” she said.

Meanwhile, lawmakers and investigators were more interested in getting answers to their many questions about why nothing was done about the problem until relatively recently.

“Why didn’t GM and NHTSA put the pieces together for ten years?” asked Rep. Tim Murphy (R-PA) in summing up the questions that many posed throughout the two days. “Why didn’t anyone ask the critically important questions?”

In fact, it was apparent from many of the documents obtained by Congress that GM officials were aware of complaints about the ignition going all the way back to 2001, and that over the years they had  had quietly debated the question of what to do about the badly flawed and potentially lethal part. Repeatedly, they came up with the wrong answer. 

Related: GM’s Mounting Killer Car Problem

The problem with the ignition switch was that it frequently  cut off after being jostled – and in the process cut off the power to the steering and brake systems and prevented airbags from deploying in the event of a car crash.   

The Center for Auto Safety yesterday revealed for the first time in their letter to Barra and that GM had designed two ignition switches in 2001 for the Saturn Ion and Chevrolet Cobalt but rejected the safer design in favor of an unsafe but cheaper design. In late 2006, GM resurrected the safer design under the same part number unbeknownst to the public or federal highway safety regulators until 2013.

The Center discovered the two ignition switch designs in what Ditlow – a trained chemical engineer -- described as obscure but “smoking gun” documents submitted to Congress prior to   Barra’s testimony. The documents, among other things, show the Engineering Drawings done in 2001 for both ignition switch designs. At issue was the configuration of one of the switch’s key parts, called a detent plunger and spring. The detent plunger and spring inserts into bores or slots inside the ignition switch to secure it in one position or another. 

The better designed – and marginally more expensive – detent plunger and spring is longer than the other one and requires increased effort or torque to turn the key.  Another document was the Engineering Drawing showing the change back to the safer design in 2006 and an email from Antero Cuervo of Delphi – the manufacturer of the ignition switches -- explaining when the ignition switch was changed despite having the same part number. 

In their letter to Barra, Ditlow and Claybrook said, “We call on you to publicly and openly produce all documents relevant to the decision-making on the selection of the lethal short detent spring and plunger switch in 2001 including documents showing the costs of the two switches.” 

“Who inside GM made these decisions and at what level,” they asked? “Given these startling revelations that a safer switch existed in 2001 before the Saturn and Cobalt were put into production, we call on you to make the full unvarnished internal investigation of Anton Valukas public as he must surely probe these areas.” 

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