General Motors has issued a new recall for 355 vehicles, while also facing a possible lawsuit by an investor over “immorality”. GM may also face a new probe involving the automaker’s bankruptcy and its relation to the original recall that thrust GM into the headlines, just as the agency responsible for investigating the problem at GM faces an audit from the Department of Transportation.
The New York Times reports the Justice Department has added an additional probe into their ongoing investigation of the 2014 recall of 1.76 million vehicles over a defective ignition switch linked to 31 crashes and 12 deaths.
The probe questions whether GM knew everything about the problem going into the 2009 bankruptcy — the automaker said they were alerted as early as 2001 — and failed to disclose the defect in full to both the federal government and the public during bankruptcy proceedings. This separate probe is being handled by the same group of FBI agents and federal prosecutors in New York who also brought forth the fraud case against Toyota that ended in a $1.2 billion settlement last week.
Meanwhile, Automotive News reports Transportation Secretary Anthony Foxx has asked the Department of Transportation’s inspector general Calvin Scovel to conduct an audit of the National Highway Traffic Safety Administration as to whether or not the agency properly looked into the issues leading up to the February 2014 recall, in light of the aformentioned crashes and deaths. The audit, according to Foxx, is to ensure “that DOT and NHTSA have a full understanding of the facts regarding the GM recall and can take corrective actions to enhance NHTSA’s safety function to the extent necessary and appropriate.”
On the investor front, Bloomberg reports a GM investor has filed a lawsuit against both the automaker and current CEO Mary Barra over every recall issued since late February this year.
In filing his complaint with the U.S. District Court in Detroit, George Pio called the automaker’s lack of immediate action “illegal and immoral,” and that news of the recalls, investigations et al surrounding GM as of late “triggered a sharp decline in the company’s share price, wiping out billions in shareholder value.”
The suit is filed on behalf of any individual who purchased stock between November 17, 2010 and March 10, 2014; no money damages have been specified.
Adding fuel to the fire are two stories from Edmunds, with the first related to the original recall regarding free loaner vehicles to those affected while their own vehicles are serviced beginning next month.
GM has called upon Enterprise, Hertz, Avis and other rental companies to help the automaker assemble a fleet for affected owners to use until the ignition switch is replaced. Though the original policy states GM owners are placed into GM vehicles, the scope of the original recall means if no related loaners are available, owners will be placed into vehicles from Ford, Honda, Chrysler et al. Underinsured owners will see a temporary boost in coverage from the automaker, as well. One source in the rental world tells us that this has been a massive undertaking for GM – with so many owners of the affected cars being under 25 (the minimum rental age at many companies) arranging coverage for these owners has been an extraordinary task.
As for the second report, Edmunds says 355 vehicles will be recalled within the week due to a transmission shift cable adjuster defect that could lead to a handful of 2014 models rolling away from where they were parked. Affected models include the Buick Regal, LaCrosse, Verano and Enclave; Chevrolet Cruze, Malibu and Traverse; and the GMC Acadia. All affected have the issue in their automatic transmissions.