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Congress To Probe General Motors Company (GM) Recall

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House Energy and Commerce Committee chairman Fred Upton (R – MI) announced that the committee will open an investigation into the recent General Motors Company (NYSE:GM) recall of 780,000 compact cars that have a faulty ignition switch which has been linked to 13 deaths, report Jeff Bennett and Joseph B. White for The Wall Street Journal.

Probe led by Auto Industry Reformer

Upton was the lead sponsor of the Tread Act of 2000, which requires car manufacturers to report any auto defect-related deaths so that it isn’t solely up to the company to determine when a problem is systemic or coincidental. Without accusing General Motors Company (NYSE:GM) of wrongdoing, Upton wants to investigate what happened to know why action wasn’t taken sooner.

“Did the company or regulators miss something that could have flagged these problems sooner? If the answer is yes, we must learn how and why this happened, and then determine whether this system of reporting and analyzing complaints that Congress created to save lives is being implemented and working as the law intended,” said Upton.

The flawed ignitions allow the key to be turned while the vehicle is operating, usually because of a hard jolt or a key ring with lots of heavy weight, causing vehicles to stall, turn off, or become difficult to steer, any of which can cause an accident. Even worse, in some cases where there was an accident the air bag didn’t deploy because it’s also sensitive to the state of the ignition.

General Motors engineers knew about defect as early as 2004

General Motors Company (NYSE:GM) has acknowledged that at least some employees in the engineering department have known about the problems since 2004 or 2005, but CEO Mary Barra says that she had been unaware of the problem until now and that she ordered the recall as soon as she was informed of it. Multiple accidents and deaths related to the ignition caused GM to hold inquiries into what went wrong and to start using a redesigned ignition in 2007, but it didn’t order a recall at that time.

There have also been allegations that General Motors Company (NYSE:GM) held a high-level investigation into the matter in 2011 and that the National Highway Traffic Safety Administration (NHTSA) knew about the problem when it held a 2007 meeting with GM but opted not to take action to force a recall. The NHTSA has filed questions for GM to answer on the matter, but hasn’t yet commented on what it might have done differently.

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