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 The latest recalls boosted the number of deaths acknowledged by GM
to at least 16 in cars with switch-related problems. The automaker
said it now knows of 61 crashes tied to faulty ignition switches,
although U.S. lawmakers and safety regulators have said they expect
the death toll to climb.
The latest fatalities occurred in two separate high-speed crashes,
one involving a 2003 Chevrolet Impala, the other a 2004 Impala,
according to GM spokesman Jim Cain. The air bags failed to deploy in
both crashes, Cain said, but GM cannot conclusively link the
nondeployment to the ignition switches.
"Among these recalled vehicles, GM is aware of seven crashes, eight
injuries and three fatalities," GM said in a statement. "The fatal
crashes occurred in older model full-size sedans being recalled for
inadvertent ignition key rotation. There is no conclusive evidence
that the defect condition caused those crashes."
A Reuters investigation in early June found that at least 74 people
had died in GM cars in accidents with similarities to those that GM
earlier had linked to 13 deaths involving defective ignition
switches.
The report on Monday of additional fatalities and recalls "confirms
our fears that GM's safety failures were much more widespread than
initially reported," said U.S. House Energy and Commerce Chairman
Fred Upton, a Michigan Republican, whose committee twice has
interviewed GM Chief Executive Officer Mary Barra.
GM said the latest fatalities will not be included in a compensation
fund set up to provide at least $1 million to victims of crashes
tied to defective switches in older compact cars, including the
Chevrolet Cobalt and Saturn Ion. Details of that fund, which is
being administered by attorney Kenneth Feinberg, were announced
earlier on Monday.
The compensation fund could ultimately cost GM billions of dollars,
but is seen as critical to help repair the company's tarnished
reputation and to move beyond the outstanding liability claims.
Feinberg declined to estimate how big the ultimate payout could be,
and financial analysts said it is too early to gauge what GM will
have to pay overall for its handling of the faulty switch.
The number of victims seeking damages as well as the number of
fatalities caused by the faulty part will not be known until claims
are processed, said Feinberg, who previously handled compensation
funds for victims of the BP oil spill and the September 11 attacks,
among others.
The latest recalls, covering compact and midsize cars, sedans and
crossovers from model years 1997-2014, swell the total number of
vehicles recalled by GM this year to 29 million. GM last year sold
2.8 million vehicles in the United States and 9.7 million globally.
So far this year, GM has recalled more cars than the entire U.S.
industry did in 2013.
The automaker also said on Monday it would increase by $500 million
a second-quarter charge to cover the cost of the recalls. So far
this year, the writedowns are expected to total $2.5 billion.
GM earlier this year recalled nearly 2.6 million Cobalts, Ions and
other small cars with defective switches that it linked to 54
crashes and at least 13 deaths.
Earlier this month, it recalled more than 500,000 Chevrolet Camaro
sports cars and another 3.4 million midsize and fullsize sedans,
including Chevrolet Impalas and Cadillac DeVilles.
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LEGAL PROBLEMS
On Monday, GM issued two separate recalls, both related to ignition
switches which it said could be turned off because of "inadvertent
key rotation." In turn, that could shut off the engine and cut power
to steering, brakes and air bags - issues similar to those that
triggered the earlier recalls.
Affected are 7.61 million older sedans and coupes dating back to
model year 1997, including 2000-2005 Chevrolet Impalas and 1997-2005
Chevrolet Malibus. Also recalled were 616,179 Cadillacs from model
years 2003-2014, including the CTS coupe and sedan and the SRX
crossover.
The 2004-2006 Cadillac SRX used a switch part similar to that on the
2003 Saturn Ion, Reuters reported in April. GM engineers told the
switch supplier, Delphi Automotive, about accidentally turning off
ignition switches in a Cadillac SRX with their knees more than eight
years ago, according to documents provided to U.S. safety
regulators.
The original SRX ignition-switch part also was used in the 2003-2007
Cadillac CTS, according to online GM parts catalogs reviewed by
Reuters. Delphi supplied the switches for the 2003-2007 CTS and the
2004-2009 SRX, it told the National Highway Traffic Safety
Administration.
GM did not recall the SRX and the CTS for switch-related issues,
however, until Monday.
As it has done previously, GM urged owners to remove all items from
key rings, including the fob, leaving only the ignition key. It said
it would provide dealers with an insert to change the key-head
design from a slot to a hole to reduce the chance of the key ring
and fob turning off the switch.
In early June, GM released a 325-page report on the 11-year process
of identifying defects in the Cobalt and Ion that eventually led to
the recall of those cars earlier this year. The report was prepared
by Anton Valukas, chairman of GM's outside law firm Jenner & Block,
and largely exonerated top executives.
But GM faces legal problems on a number of fronts. A county district
attorney in California on Monday announced a lawsuit accusing GM of
being a threat to public safety by concealing at least 35 safety
defects that have prompted the recall of millions of vehicles.
GM previously has acknowledged that the U.S. Department of Justice
is investigating how it handled the recall of the Cobalt and Ion.
GM shares closed down 0.9 percent at $36.30 on Monday.
(Additional reporting by Richard Cowan and Julia Edwards in
Washington and Ben Klayman in Detroit; editing by Matthew Lewis)
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