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Auto airbag maker Continental named in GM recall suit

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[April 21, 2014]  By Jessica Dye

(Reuters)  Plaintiffs' lawyers are seeking to draw Continental Automotive Systems U.S., the maker of airbag systems in recalled General Motors Co <GM.N> vehicles, into litigation over an ignition-switch defect that has been linked to 13 deaths.

A lawsuit filed on Wednesday in federal court in California is the first to name Continental, a subsidiary of German automotive supplier Continental AG <CONG.DE>, in a growing wave of litigation over GM's recall, which has so far encompassed 2.6 million vehicles.

Continental made airbag systems for the recalled cars, including sensors that determine if and when the airbags go off in an accident, according to the suit.

The case is among dozens of proposed class actions that have been filed by customers accusing GM of concealing its knowledge of the defect for more than a decade, putting plaintiffs at risk of injury and causing them to suffer economic losses on their cars, including lower resale value.

If jostled or bumped, the ignition switch can change from the "run" to "accessory" position, shutting off engines and disabling power steering, power brakes and airbags.


The California lawsuit says that Continental's system was defective because the airbag system would shut off when the key switched positions, and the combination of alleged defects was "particularly dangerous", the complaint said.

A lawyer for the plaintiffs, Adam Levitt of Grant & Eisenhofer, said that Continental appears to have known about the ignition defect as early as 2005, after it met with GM to investigate a crash involving a 2005 Chevrolet Cobalt.

"Continental did nothing to redesign its airbags so that they would deploy even if the car's power went out, nor did it warn NHTSA (the National Highway Traffic Safety Administration) or the public," Levitt said in a statement Thursday.

The head of the National Highway Traffic Safety Administration, David Friedman, told a congressional panel earlier this month that NHTSA investigators were surprised to learn that airbags in the recalled GM cars did not deploy when the key is in the accessory or off position. He said his agency was conducting an industry-wide look at the computer algorithm which is programmed into the airbag sensor.

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Continental said on Friday that it had not seen the suit so could not comment on its details.

"Our systems meet global technology standards and entirely fulfill the exact specifications of our customers," the company said in an emailed statement.

A spokeswoman told Reuters on April 7 that it is a "global industry practice that the airbags do not deploy if the ignition is in the off position."

GM spokesman Greg Martin declined to comment. The company has previously apologized for the switch problems and said it is working to replace the faulty parts.

Continental is not the first GM supplier to be drawn into litigation over the recall. Delphi Automotive <DLPH.N>, which produced the ignition switch, is a defendant in several lawsuits, although it is not named in the Los Angeles case.

The case is Saclo v. General Motors, U.S. District Court for the Central District of California, No. 14-604.

(Reporting by Jessica Dye in New York; additional reporting by Eric Beech in Washington and Victoria Bryan in Frankfurt; editing by Ken Wills and Jason Neely)

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