General Motors Company (NYSE:GM) revealed in its regulatory filing with U.S. safety regulators that the defective ignition switch related to the recall of approximately 3.4 million vehicles were made in China.
According to the largest automaker in the United States, Dalian Alps Electronics Co. Ltd., a company based in China manufactured the defective ignition switches that were used in the Chevrolet Impala, Monte Carlo, Buick LaCrosse, Lucerne, Cadillac Deville and DTS cars.
GM switch problems similar to earlier recall
General Motors Company (NYSE:GM) said the switch problems in the recalled 3.4 million vehicles were similar to the defective switches linked to an earlier recall of 2.6 million Chevy Cobalts, Saturn Ions and other vehicles that led to at least 13 fatalities.
The defective ignition switch used in the recalled vehicles can be jarred out of run position, and it could possibly affect the air bags, power brakes and power steering, according to General Motors Company (NYSE:GM).
The automaker faced numerous investigations and paid $35 million civil penalty for its failure to report a safety defect in a timely manner in connection to the earlier recall. General Motors Company (NYSE:GM) also agreed to accomplish the oversight requirements implemented by the National Highway Traffic Safety Administration (NHTSA).
According to the agency, General Motors Company (NYSE:GM) paid “the highest civil penalty amount” as a result of its investigation stemming from the recall.
Last week, GM CEO Mary Barra presented the findings of the internal investigation related to the defective ignition switch problems to the U.S. House Committee on Energy & Commerce Subcommittee on Oversight and Investigations. Former United States Attorney Anton Valukas led the internal probe.
Barra told lawmakers that the Valukas Report was “extremely thorough, brutally tough and deeply troubling,” as it discovered a pattern of incompetence and neglect. According to her, General Motors Company (NYSE:GM) fired 15 employees who failed to perform their job to resolve the problem.
The automaker also conducted the most exhaustive and comprehensive safety review and created a new Global Product Integrity organization to enhance its overall safety and quality. Furthermore, GM hired Ken Feinberg to review options for establishing a compensation program for the families of those who are injured or lost their loved one.
Ignition Switches in most recent recall slightly below specifications
General Motors Company (NYSE:GM) said the ignition switches used in the cars that were recently recalled were “slightly” below the torque specifications of the company. Torque is a force need to move the switch out of the run position.
According to the automaker, it does not need to replace the ignition switches; instead it would replace or rework ignition keys to remove a slot at the end of the key that allows a dangling key ring to slide to one side and pull the ignition key out of run position.
General Motors Company (NYSE:GM) indicated in its filing that it would not send a notice of reimbursement to the owners of the recalled vehicles because the repair was not available in the past.
Another automaker discovered similar problem
General Motors Company (NYSE:GM) indicated that another automaker found out the problem regarding an auto part that was made in China earlier this year.
In February, Aston Martin found out a similar problem. The British automaker found out that a Chinese sub-supplier used counterfeit material in an auto part supplied to the company, and decided to recall the majority of its sports car manufactured since late 2007.