The Truth About Cars » History http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 17 Apr 2014 22:57:46 +0000 en-US hourly 1 http://wordpress.org/?v=3.8.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » History http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com/category/news-blog/history-news-blog/ GM Internal Investigation Hindered By Corporate Culture http://www.thetruthaboutcars.com/2014/04/gm-internal-investigation-hindered-by-corporate-culture/ http://www.thetruthaboutcars.com/2014/04/gm-internal-investigation-hindered-by-corporate-culture/#comments Tue, 15 Apr 2014 10:58:40 +0000 http://www.thetruthaboutcars.com/?p=798970 GM Next

Bloomberg reports now-former General Motors engineer Brian Stouffer conducted a two-year internal investigation into the out-of-spec switch at the heart of the automaker’s current recall crisis, only to find confusion and resistance along the way to finding answers as to why vehicles up through 2008 were stalling out. In addition, Stouffer reported to three different executives assigned to the investigation in one year as it moved along, as well as the lack of sufficient cases that met the criteria required. Only in late 2013, when Delphi responded to Stouffer’s inquiry by providing the document showing the changes made to the switch back in 2006, did the investigation come to a head.

Automotive News posits that the link between the out-of-spec switch and the 13 fatalities under the spotlight may have been muddied under other circumstances focused upon the drivers involved, ranging from being unbelted and driving under the influence, to speeding and lack of experience behind the wheel. Further, both police and the National Highway Traffic Safety Administration didn’t immediately make the link between the switch and undeployed airbags, the former citing numerous instances and the various reasons behind each failure.

Though it would appear as though GM were the new kings of recalls as of late, Boston-based used-car shopping site iSeeCars compiled data of the top 15 automakers who sold vehicles in the United States between 2005 and 2014, and found the automaker among the middle of the recall list with 96 recalls for every 100 vehicles sold. Toyota took the No. 1 spot with 167 recalls per 100 sold, while Mercedes-Benz took last place with 38 per 100.

Within GM, public relations head Selim Bingol and human resources chief Melissa Howell have both left the automaker “to pursue other interests.” The departures are not related to the recall crisis, according to spokesman Greg Martin, explaining the exits as “a part of any transition where the CEO makes changes and puts together her leadership team.” That team will now consist of John Quattrone, who will head the human resources department CEO Mary Barra ran until 2011, while head of investor relations Randy Arickx will serve as interim PR chief until a permanent replacement is found.

Finally, The Wall Street Journal reports Opel may finally break even ahead of a 2016 target date after years of seeing red. The charge toward equilibrium is being cautiously led by CEO Karl-Thomas Neumann, whose changes to the company — including the closure of a plant in Germany, a $6 billion investment in Europe, and the introduction of 23 models by 2016 — have helped Opel see a rise of 3 percent in European Union sales during the first two months of 2014. The news follows similar signs of hope for GM overall, as Automotive News adds Cadillac’s and Buick’s first-ever wins in J.D. Power & Associates’ 2014 Customer Service Index, as well as the Chevrolet Equinox/GMC Terrain twins being the only two midsize SUVs to receive a “good” rating by the Insurance Institute for Highway Safety in the small-overlap test as small victories for the automaker.

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Dealers Still Waiting For Replacements, DeGiorgio Linked To Original Design And Upgrade http://www.thetruthaboutcars.com/2014/04/dealers-still-waiting-for-replacements-degiorgio-linked-to-original-design-and-upgrade/ http://www.thetruthaboutcars.com/2014/04/dealers-still-waiting-for-replacements-degiorgio-linked-to-original-design-and-upgrade/#comments Mon, 14 Apr 2014 14:00:51 +0000 http://www.thetruthaboutcars.com/?p=797362 GM ignition diagram

Automotive News reports dealers are still waiting for the ignition switches meant to replace the out-of-spec switch at the center of the ongoing recall crisis at General Motors. The switch was to have arrived at dealerships beginning this week, yet most dealers are in a “holding pattern” on deliveries. Once the parts do arrive, service bays will begin work on affected customer vehicles immediately before turning toward the used lot, where vehicles under the recall are currently parked until the customer vehicles are fixed.

As for GM seeking help from NASA with its woes, however, The Detroit Bureau learned from NASA Deputy Associate Administrator for Communications Bob Jacobs that his employer “is not working with General Motors on its ignition switch issue”; a separate source claimed “low-level” discussions between the two were taking place, but hasn’t gone any further thus far. He added that while NASA would be more than willing to help GM, a formal request would require some coordination between the agency and both the National Highway Traffic Safety Administration and the Justice Department so as to not interfere “with their own, ongoing investigations of the GM ignition switch recall.”

Speaking of the Justice Department, Reuters says five senators, including Richard Blumenthal of Connecticut and Barbara Boxer of California, penned a letter asking Attorney General Eric Holder to “intervene in pending civil actions to oppose any action by GM to deny responsibility for damages”:

We write to request your immediate intervention and assistance on behalf of victims of severe damage – financial harm, physical injury, and death – resulting from serious ignition switch defects in General Motors (‘GM’) cars.

The aforementioned actions may be in reference to the liability shield erected upon the automaker’s 2009 exit from Chapter 11 bankruptcy, where “New GM” is only responsible for the claims linked to the switch from June 2009 forward.

That division within the company may be more of a thin line than a 4-inch-thick steel plate, however, as Autoblog reports an investigation by the House Energy and Commerce Committee uncovered an email exchange between the NHTSA and GM last July to discuss the latter’s “indifferent attitude toward safety issues” face-to-face. The agency cited the automaker’s slow response to urgent matters and preference toward regional recalls over full recalls as two examples of GM not having changed much since leaving bankruptcy.

Bloomberg adds the agency itself didn’t do enough to take GM to task on its attitude toward safety, though, based on a memo unearthed by the committee regarding airbag failures on a number of Chevrolet Cobalts and Saturn Ions with warranty claims being four times’ higher than similar competitors. The decision to investigate those claims was rejected by a review group within the NHTSA, believing the airbag issue “did not stand out” among other incidences of failure.

Automotive News reports the committee also found an email chain that ties GM engineer Ray DeGiorgio — who denied having knowledge of the April 2006 change to the ignition without a change to the part number — with said change. In short: DeGiorgio signed-off on both changes to the spring and plunger to help prevent the slipping issue now linked to 13 fatalities and 33 accidents, as well as on the decision to retain the original number issued to the part he designed for the Saturn Ion as his first project for GM in 2001.

Regarding the Ion, Reuters says the troubled development of the compact vehicle — and the equally troubled relationship between GM and supplier Delphi — may have laid the groundwork for the current recall crisis. The supplier alerted the automaker about the out-of-spec switch, but fearing an embarrassing introduction, money issues, and the possible wrath of then-vice chairman of product development Bob Lutz, GM pressed ahead with the switch as-is.

 

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Honda Pursues 70k Annual US Fit Sales http://www.thetruthaboutcars.com/2014/04/honda-pursues-70k-annual-us-fit-sales/ http://www.thetruthaboutcars.com/2014/04/honda-pursues-70k-annual-us-fit-sales/#comments Mon, 14 Apr 2014 13:30:26 +0000 http://www.thetruthaboutcars.com/?p=797498 2014-honda-jazz-2015-honda-fit-photo-gallery-medium_17

In 2008, Honda sold nearly 80,000 Fit subcompacts to the United States, and is preparing to move 70,000 annually from the lot to the driveways of America thanks to its new Celaya, Mexico plant.

Ward’s Auto reports the automaker had a difficult time hitting the milestone set in 2008 due to production constraints at home and fervent demand abroad. With the new plant, however, Honda will be able to make 200,000 Fits annually, as well as the Fit-based crossover set to begin production later this year.

As for who Honda expects will buy the 70,000+ Fits aimed for the U.S. market — aside from lifestyle bloggers — product planner Hiroaki Hamaya says the subcompact is already “capturing the highest household income and percentage of college grads.” Data from J.D. Power bears this out: Fit buyers hold an average income of $75,000 while 64 percent of them have graduated college. However, median age and percentage of buyers under 35 currently lag behind competitors such as the Ford Fiesta and Chevrolet Sonic.

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UAW Subpoenas Haslam, Corker To Appear At VW NLRB Appeal Hearing http://www.thetruthaboutcars.com/2014/04/uaw-subpoenas-haslam-corker-to-appear-at-vw-nlrb-appeal-hearing/ http://www.thetruthaboutcars.com/2014/04/uaw-subpoenas-haslam-corker-to-appear-at-vw-nlrb-appeal-hearing/#comments Fri, 11 Apr 2014 09:30:50 +0000 http://www.thetruthaboutcars.com/?p=793666 Governor_Bill_Haslam

Tennessee governor Bill Haslam and U.S. Sen. Bob Corker are just two of the 20 prominent Tennessee witnesses subpoenaed by the United Auto Workers to appear at the union’s hearing before the National Labor Resource Board later this month, where the UAW will appeal the results of the organizing election held at the Volkswagen plant in Chattanooga back in February of this year.

The Detroit News reports the 20 witnesses subpoenaed are ordered to bring emails and documents related to a state government incentive made to VW in the aim of bringing production of a planned midsize SUV to Tennessee. Outgoing UAW president Bob King defended his union’s decision:

The purpose of the NLRB’s investigation is to determine the truth concerning the third-party interference in the February election at Volkswagen’s Chattanooga plant. The NLRB’s rules call for the use of subpoenas as part of this truth-seeking exercise. The UAW hopes that all parties who receive subpoenas will fully comply by providing the NLRB with the requested documents and with their testimony.

The action comes on the heels of an exposé conducted by Nashville CBS affiliate WTVF-TV regarding documents linking the Haslam administration to an incentive proposal made to the German automaker on the alleged condition the plant in Chattanooga remain unorganized; the proposal was withdrawn in January ahead of the election.

Among the others subpoenaed by the UAW include Tennessee house speaker Beth Harwell, economic development commissioner Bill Hagerty, and anti-tax activist Grover Norquist.

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GM Seeks Aid From NASA, Issues New Ignition-Related Recall http://www.thetruthaboutcars.com/2014/04/gm-seeks-aid-from-nasa-issues-new-ignition-related-recall/ http://www.thetruthaboutcars.com/2014/04/gm-seeks-aid-from-nasa-issues-new-ignition-related-recall/#comments Fri, 11 Apr 2014 09:00:47 +0000 http://www.thetruthaboutcars.com/?p=793690 gm-headquarters-logo-opt

Autoblog reports 2.19 million of the same vehicles under the current General Motors ignition recall are under a new ignition-related recall, as well. The new recall warns of a problem where the key can be removed without the switch moved to the “off” position. According to GM, the automaker is aware of “several hundred” complaints and at least one roll-away accident resulting in injury, and is instructing affected consumers to place their vehicles in park or, in manuals, engage the emergency brake before removing the key from the ignition until repairs are made.

Regarding the original recall, The Detroit News reports has called upon NASA’s Engineering & Safety Center to review whether or not the 2.6 million affected Chevrolets, Pontiacs and Saturns are safe to drive with just the ignition key in position. The agency, which has performed similar reviews in the past, will look over the work performed by the automaker in the latter’s effort to make the affected vehicles safe to drive, as well as review its overall approach to safety concerns.

On the financial front, Automotive News says GM will take a $1.3 billion charge in Q1 2014 for the original recall, 40 percent greater than the $750 million charge originally estimated at the end of last month. The charge — which includes repair costs and loaners for affected owners — comes on the heels of a $400 million charge tied to currency challenges in Venezuela, the total sum of which threatens to knock out most if not all of the automaker’s Q1 2014 earnings set to be announced toward of end of this month.

Meanwhile, The Detroit News reports Michael Carpenter, the CEO of former GM financial arm Ally Financial, says his company will complete its exit from government ownership by Election Day of this year:

The U.S. Treasury is quite happy today. My own view is they will definitely be out before the election and we are close to having Treasury and U.S. government ownership in the rearview mirror.

By the end of trading Thursday, Ally’s IPO netted taxpayers $17.7 billion with a profit of $500 million on the $17.2 billion bailout of the consumer finance company, while the Treasury currently holds 17 percent of its remaining shares after selling 95 million for $25 per share at the opening bell; share price fell 4.4 percent to $23.50 at the closing bell.

In lawsuit news, Automotive News reports GM settled with the families of two Saturn Ion drivers who lost their lives in 2004 when their respective cars’ airbags failed to deploy. The two fatalities were identified by the publication as the earliest of 13 linked to the out-of-spec ignition switch at the root of the current recall crisis. In addition, while one case was settled out-of-court in September of 2007, the second case drew its settlement terms after the automaker filed for bankruptcy in June of 2009, placing the plaintiffs and their lawyer with other unsecured creditors.

The Detroit News reports Cadillac and Buick are at the top of their respective lists for dealer service satisfaction as determined by the J.D. Power & Associates U.S. Customer Service Index Study. Cadillac’s dominance over the luxury brand category comes as former No. 1 Lexus — who held the top spot for five consecutive years — falls to third behind Audi, while Buick leads Volkswagen, GMC, Mini and Chevrolet in the mass-market brand category.

Finally, Autoblog reports the last of eight Corvettes swallowed by the sinkhole that formed inside the National Corvette Museum in Bowling Green, Ky. back in February has been recovered. The 2001 Corvette Mallett Hammer Z06 will need extensive work performed to bring it back to its original state, but not before it joins its brethren in a new exhibit entitled “Great 8″ beginning next week. The exhibit will last until the museum’s 20th anniversary in late August, at which point GM will begin restoration work on the eight Corvettes.

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GM Fined $28k By NHTSA, Places 2 Engineers On Paid Leave http://www.thetruthaboutcars.com/2014/04/gm-fined-28k-by-nhtsa-places-2-engineers-on-paid-leave/ http://www.thetruthaboutcars.com/2014/04/gm-fined-28k-by-nhtsa-places-2-engineers-on-paid-leave/#comments Thu, 10 Apr 2014 14:56:25 +0000 http://www.thetruthaboutcars.com/?p=793305 Rencen. Picture courtesy GM

Associated Press reports General Motors has placed two engineers on paid leave as “an interim step” in the investigation conducted by former U.S. attorney Anton Valukas. Spokesman Greg Martin declined to name the two engineers in question.

The Detroit News reports GM has been fined $28,000 by the National Highway Traffic Safety Administration for failing to answer in full by the April 3, 2014 deadline the 107-question survey sent to the automaker regarding the recall of 2.6 million vehicles with an out-of-spec ignition switch linked to 13 fatalities and 33 accidents. Furthermore, the agency will fine GM $7,000/day so long as the automaker continues to fail to comply with the inquiry in full, and may call in the Justice Department to sue GM for answers and fines.

As for how this came to pass, GM says it couldn’t provide all of the answers as the outside investigation by Valukas had yet to be completed. Meanwhile, spokesman Greg Martin defended the automaker’s response to the survey, citing the millions of related documents already delivered to the NHTSA as proof of compliance.

The agency may not be alone in its dimming view of GM, however, as concerns running through Wall Street have sent price targets of GM stock downward amid gloomy forecasts of rising costs, diminished earnings and other challenges outside of the recall crisis. Analysts for Morgan Stanley and RBC Capital Markets have dropped their target prices of $49 and $47 per share to $33 and $46, respectively, with the former downgrading GM stock to “underweight.”

Without the crisis, however, the automaker still has rough seas ahead after emerging from government ownership, with Wall Street fearing for the long-term future of GM in the face of strengthening Japanese automakers — bolstered by a weakened yen — dependency on its joint ventures in China, problems in Europe and other international markets, and domestic challenges from Ford and Tesla.

In other financial news, Bloomberg reports former GM financial arm Ally Financial’s exit from U.S. Treasury ownership would allow Ally to take on more subprime auto loan borrowers. The finance company currently holds 11 percent of its portfolio in such loans, and at $25/share in its IPO, the $2.83 billion raised would give Ally a boost in attracting more subprime borrowers.

However, both CreditSights Inc. analyst Jesse Rosenthal and independent banking consultant Bert Ely shared concerns regarding the finance company’s reliance on auto loans, especially in the subprime market, citing the lack of diversification other consumer-finance companies or large banks possess in weathering the credit risk subprime auto lending could bring. Bloomberg adds that Ally’s relationship with GM — 39 percent of its lending and leasing portfolio came from the automaker in 2013 — could add an additional risk in light of the latter’s ongoing recall crisis.

Finally, Automotive News presents a history of failure between GM and its suppliers over the functionality of the ignition switch in Chevrolet Cobalts and Saturn Ions, leading to numerous changes, complaints, claims and, a decade later, a recall crisis that may bring more pain than the automaker could bear.

The first problem — Ion owners not being able to start their vehicle in cold weather — prompted the 2004 redesign currently linked to the recall, then quietly changed in April 2006 when the second and third problems — Cobalt owners not being able to shut off their vehicle unless they accidentally bumped their knee into the ignition — led to the conclusion by two engineers that the switch was mounted too low, and that it was “falling apart.”

Furthermore, in the deposition given by engineer David Trush in the case regarding the 2010 death of Brooke Melton behind the wheel of her Cobalt, Trush stated GM had its supplier at the time make replacement parts for the first ignition problem alongside a service bulletin asking dealers to install the new part in affected cars; the automaker changed suppliers in 2008, citing deficiencies in quality and production in the former supplier.

Lastly, nearly two years before the recall in April of 2012, GM began offering to replace the switch on 2007 – 2009 Cobalts and Pontiac G5s and 2008 – 2012 HHRs for free, citing a “binding condition” with the cylinder and its housing which could prevent basic functionality of the ignition system.

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GM Dealers Deal With Part Backlog, CEO Asked To Back Rental Car Bill http://www.thetruthaboutcars.com/2014/04/gm-dealers-deal-with-part-backlog-ceo-asked-to-back-rental-car-bill/ http://www.thetruthaboutcars.com/2014/04/gm-dealers-deal-with-part-backlog-ceo-asked-to-back-rental-car-bill/#comments Wed, 09 Apr 2014 14:03:25 +0000 http://www.thetruthaboutcars.com/?p=791337 ChevyDealership03.jpg

Automotive News reports the repairs of some 2.6 million vehicles affected by the 2014 General Motors ignition switch recall will be delayed by one week as the needed part slowly enters into the automaker’s dealership network. Though most dealers thought they would be receiving the part Monday, GM spokesman Kevin Kelly insisted the part was set to arrive sometime during “the week of April 7″:

We plan to send letters this week informing affected customers that parts are arriving at dealerships and to schedule a service appointment with their dealer. Repairs are likely to begin to follow soon after the customer letter mailing.

Until then, dealerships may face service backlogs, especially with affected vehicles already on the lot that cannot be sold until they are repaired, which can only happen once customer vehicles go through the 30-minute swap. On the other hand, while dealers have noticed some frustration from their customers, the majority of their base was found to be patient with the status of the repair plan.

Over in Washington, D.C., The Detroit Press reports Senator Barbara Boxer of California sent a letter to GM CEO Mary Barra asking her to back a bill that would keep recalled rental cars under recall off of the road. The bill would require affected rentals to be grounded within 24 to 48 hours upon receipt of a safety recall notice, as well as establish a temporary protocol evaluating safety risk if parts are not available right away, and allow the National Highway Traffic Safety Administration the oversight to investigate rental company safety practices for the first time.

Though the bill — named after two sisters who lost their lives in 2004 when their rental car caught fire and crashed into a truck — has seen support by rental companies, the Alliance of Automobile Manufacturers — where GM is a member — has stymied the legislation out of a fear that automakers would be forced to fix rental fleets first before individual-owned vehicles, as well as potential lawsuits from the rental companies over lost revenues.

Detroit Free Press reports the NHTSA is calling upon engineers to be the agency’s eyes and ears in the battle against defects like the one linked to the current recall crisis. Lead attorney Kevin Vincent laid his case out before attendees of this year’s SAE World Congress:

Each manufacturer is actually responsible for identifying defects… and promptly reporting those defects to NHTSA. The message I have delivered to senior lawyers at the automakers is that they need to have practices and procedures in place so that when they find a problem, they will respond.

The first line of defense against safety defects is not my agency — not NHTSA. You are truly the first line of defense… to prevent safety defects from reaching the American public.

The safety agency has been taken to task as of late regarding the GM recall as well as those related to Jeep, and has been asked by the Center for Auto Safety to investigate an airbag deployment issue with 2003 through 2010 Chevrolet Impalas.

Automotive News says the 2014 Chevrolet Equinox and its GMC Terrain twin both received a top safety pick+ award from the Insurance Institute for Highway Safety in surviving the group’s new small-overlap crash test designed for midsize SUVs. The results were linked to improvements in the front structure and door-hinge pillars.

Finally, The Detroit News reports GM will pay a dividend of 30 cents per share for Q2 2014 on June 26 to all shareholders of record as of June 10. The dividend is the second consecutive payment made by the automaker to shareholders — the first, worth 30 cents/share for Q1 2014 earnings, was paid last month — and will cost $1.8 billion annually.

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NHTSA Asked To Investigate Impala Airbags, GM May Compensate Recall Victims http://www.thetruthaboutcars.com/2014/04/nhtsa-asked-to-investigate-impala-airbags-gm-may-compensate-recall-victims/ http://www.thetruthaboutcars.com/2014/04/nhtsa-asked-to-investigate-impala-airbags-gm-may-compensate-recall-victims/#comments Tue, 08 Apr 2014 11:59:32 +0000 http://www.thetruthaboutcars.com/?p=790113 '06-'09_Chevrolet_Impala_Taxicab

Bloomberg reports the Center for Auto Safety, citing a government petition from former General Motors researcher Donald Friedman, is asking the National Highway Traffic Safety Administration to open a defect investigation into 2003 – 2010 Chevrolet Impalas over a glitch in the car’s software that could “misread a passenger’s weight,” preventing frontal airbags from deploying. The agency has 143 records of fatalities linked to failed airbags in the Impala, 98 of which noted the occupants were wearing seat belts at time of death.

The request reflects growing concern over the algorithms used in advanced airbags, designed to meet strengthened U.S. regulations in 2003 after previous airbags were found in 300 cases to prove fatal to small adults and children due to excessive force upon deployment, and where improvements could be made.

Going in-depth regarding the April 2006 sign-off of the improved version of the out-of-spec ignition switch linked to the ongoing 2014 GM recall crisis, Automotive News found that while midlevel engineer Ray DeGiorgio put his signature upon what turned out to be the validation sign-off presented before the Senate hearing last week, former engineers have noted that said document was merely placing “a bow” on a package built upon by several engineers before presentation to GM. The resulting paper trail could shed more light on how the decision came to be made, as the anonymous engineers told the publication said decision to change the part would need to go through several checks and balances before signing-off on the upgraded part.

As for out-of-spec parts in general, Automotive Industry Action Group senior program manager for quality Scott Gray says that while a part may be “out of tolerance,” it may not be “the root cause of a failure” unless said part “affects a component’s fit, form or function.”

At that point, the part would go through two industry-standard protocols: Failure Mode Effects Analysis, and Production Part Approval Process. The first is a constantly updated document that gives engineers the tools needed to evaluate the out-of-spec part and related components in determining where problems could arise prior to approving a design. The second, used by suppliers, determines whether or not the part can be built, with automakers paying for tooling only upon successful completion. Further, if even a single tiny change occurs with the part, the entire part must undergo the protocol again.

CNN Money reports GM is debating on whether or not to compensate affected customers whose relatives were either injured or killed in recall-related accidents prior to the automaker’s emergence from Chapter 11 bankruptcy in 2009. Should GM do so, the liability shield established in the bankruptcy would fall, opening itself to 2,500 lawsuits left behind with “Old GM” in so doing.

Finally, Autoblog Green reports Chevrolet will make an announcement today regarding the next-gen Volt involving a boost of 1,400 jobs and $450 million spent in preparing both the Detroit-Hamtramck Assembly and Brownstown Township battery plant for the updated EV. Speculation of what will be announced include a new platform for the 2016 Volt to an all-new unnamed EV, as well as Opel receiving a vehicle priced lower than the Ampera.

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GM Shareholders Unflappable As Recall Repairs Begin This Week http://www.thetruthaboutcars.com/2014/04/gm-shareholders-unflappable-as-recall-repairs-begin-this-week/ http://www.thetruthaboutcars.com/2014/04/gm-shareholders-unflappable-as-recall-repairs-begin-this-week/#comments Mon, 07 Apr 2014 12:58:22 +0000 http://www.thetruthaboutcars.com/?p=788714 GM-building-US-Flag

In spite of General Motors losing $3 billion in shareholder value over four weeks since the recall crisis began, Bloomberg reports investors are holding onto their shares in the belief the automaker will recover from the debacle. Though questions about the delay persist, most shareholders are pleased with how CEO Mary Barra is guiding her company through the maelstrom.

Other factors in the massive stock decline include overseas challenges and weaknesses in product lines, including bringing European profits into the black, while Chevrolet’s Silverado fights Ram’s offerings in order to regain its traditional place in the monthly sales charts.

For those affected by the recall, CNN Money reports repairs of the out-of-spec ignition switch found in a handful of 2003 – 2011 vehicles will begin Monday, though the repairs will focus on the original recall of 2003 through 2007 models first, with fixes due later for 2008 – 2011 vehicles. GM advises consumers to make an appointment with their dealers before bringing in their affected vehicles. The repair is free of charge, and will take 30 minutes to accomplish, though customers may have to wait longer due to “scheduling requirements,” according to the automaker.

Speaking of the dealers, Bloomberg reports GM dealers as a whole have had to “act as therapists” for their customers who, like owner John McEleney of Clinton, Iowa, have been bombarded by recall news on a daily basis:

It’s a little bit unnerving because GM is on the front page — not of the business section, but the front page of the paper and the lead story on the news every day. People are concerned because they’re GM owners and they see all this publicity regarding GM.

Regarding the emergency injunction that would have forced GM to request affected consumers to park their cars until they were repaired, Detroit Free Press says U.S. District Judge Nelva Gonzales Ramos in Corpus Christi, Texas needs more time to thoroughly examine the brief filed on behalf of 15 families.

As for the National Highway Traffic Safety Administration, New York Times reports the agency and Congress both face questions over the former’s handling of the GM recall, from funding and punishments available to the NHTSA, to how the agency couldn’t find a clear link between the out-of-spec ignition and undeployed air bags in 2003 through 2006 Chevrolet Cobalts and Saturn Ions. Consumer advocate and former NHTSA chief Joan Claybrook offers this summation:

General Motors made the part, they designed the part, they sold the part that was defective and they knew about the problem fairly early on. And I believe that General Motors has the greatest culpability. But there is a really important story about NHTSA’s failure to handle this properly.

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GM Adds Clinton Media Director To Crisis Team http://www.thetruthaboutcars.com/2014/04/gm-adds-clinton-media-director-to-crisis-team/ http://www.thetruthaboutcars.com/2014/04/gm-adds-clinton-media-director-to-crisis-team/#comments Fri, 04 Apr 2014 19:27:37 +0000 http://www.thetruthaboutcars.com/?p=787369 Original 5 tower complex, John Portman, 1977

In an interview with New York Magazine, consumer advocate Ralph Nader said General Motors CEO Mary Barra has “a good opportunity” to make serious changes to the corporate cost culture that gave rise to the 2014 ignition recall crisis. Suggestions include appointing an independent ombudsman with a direct line to the president and CEO for engineers who need to speak out about possible problems without having to go through “cost-concerned bosses,” as well as holding accountable all involved in any cover-up of any potential product issues.

Nader also believes the federal government should go after personal prosecutions of those tied to the current recall, but adds that unless the media keeps putting the pressure on the Justice Department to do so, the only thing that could come is a settlement in the vein of the one reached between the agency and Toyota earlier this month.

As for where Barra was during the 14 years it took for the recall to surface, Forbes wove her 34-year-long résumé with General Motors into the recall timeline. In short: Barra would have been made aware of the ignition switch problem as early as 2011, when then-CEO Dan Akerson made her head of global product development, yet it was only in December of 2013 — when the torch was passed from Akerson to Barra — when the new CEO was presented with an analysis of the issue linked to the Chevrolet Cobalt; the recall decision would be presented to Barra by product development chief Mark Reuss at the end of January 2014.

Detroit Free Press reports the National Highway Traffic Safety Administration received 200,000 from GM in response to the 107-question survey aimed to drill down what had happened leading up to the recall, as explained in a statement issued by the automaker:

The company has submitted some 200,000 pages of documents and will provide today answers to nearly 65% of the questions. GM is cooperating fully with NHTSA and is keeping the agency apprised at every step of its progress as it works to respond to the remaining questions within the Special Order.

The agency will release the documents upon vetting, a process that could take weeks to accomplish.

Meanwhile, Bloomberg reports the task force appointed by the Obama Administration to manage GM’s bankruptcy proceedings were not made aware of the out-of-spec ignition and subsequent reports linked to its failure. The task force spent more time focusing on what brands needed to be cut and how pensions and health care would be handled, with then-current product-liability claims — totaling $414 million pre-bankruptcy — given a broad look without looking ahead toward future claims.

Within the Capitol, the nation’s lawmakers are considering higher fines and criminal liability in the wake of the two congressional hearings earlier this week. Senator Jay Rockerfeller of West Virginia plans to propose an update to the 2000 TREAD Act in the aim of giving the NHTSA more firepower to take automakers to task over failures to properly and quickly handle potential problems, while regulators would like to boost the agency’s fine limit from $35 million to $300 million.

Back in Detroit, GM has hired crisis-communications expert and former director of media affairs for the Clinton Administration Jeff Eller to join the growing team of experienced crisis managers — including Kenneth Feinberg and Anton Valukas — assembled to guide the automaker through the ongoing recall debacle. Eller worked on the Firestone-Ford crisis in 2000, and will have a number of GM’s allies inside the Beltway on his side.

GM’s partner in the maelstrom, Delphi, may emerge less unscathed if the supplier’s stronger bankruptcy protections hold according to Reuters. Unlike the automaker, Delphi did not assume successor liability during its 2009 bankruptcy proceedings, forcing lawyers to convince any judge who hears their cases that Delphi covered-up the design flaw, and thus, should force “New Delphi” into becoming liable.

Speaking of lawsuits, Bloomberg reports U.S. District Judge Nelva Gonzales Ramos in Corpus Christi, Texas is preparing to consider issuing an order to GM to instruct all affected consumers to park their vehicles until the flaw is fixed. The order is part of a class-action lawsuit filed by Robert Hilliard on behalf of Charles and Grace Silvas, seeking as much as $10 billion in lost resale value for the vehicles under the recall. The Detroit News adds Hilliard sent an email to Barra with evidence from an affidavit illustrating that even with the key stripped down to the bone, the switch will still shut the vehicle off, including the airbag system.

Finally, Reuters reports GM dealerships may have more than polar vortices to weather on the sales floor as a result of the recall. Dealers have reported fielding as many as 50 calls per day from concerned consumers over what to do with their affected vehicles, as well as offering more rental cars and taking in more trade-ins. Spokesman Jim Cain offered his view on the situation facing dealers:

Time will tell. In the long term, we will be judged on how we take care of customers. We have advertising incentives and other tools to use if there’s evidence that sales in the short term may be impacted. But we haven’t seen that.

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Barra Testifies Before US Senate Subcommittee http://www.thetruthaboutcars.com/2014/04/barra-testifies-before-us-senate-subcommittee/ http://www.thetruthaboutcars.com/2014/04/barra-testifies-before-us-senate-subcommittee/#comments Thu, 03 Apr 2014 11:55:13 +0000 http://www.thetruthaboutcars.com/?p=786625 U.S. senator accuses GM of 'culture of cover-up'

On the second and final day of testimony before Congress, The Detroit Press reports the U.S. Senate Commerce, Science and Transportation subcommittee fired several volleys at General Motors CEO Mary Barra over her lack of answers or greater action during the ongoing GM ignition recall crisis.

Finding no allies from either side of the aisle, Barra faced tough questions and criticisms from the members of the subcommittee, with the toughest attacks drawn from subcommittee head Senator Claire McCaskill of Missouri. The senator proclaimed former engineer Ray DeGiorgio “repeatedly lied” about knowledge of the April 2006 fix of the out-of-spec ignition switch, citing GM’s “culture of cover-up” as encouragement for egregious violations of the public trust.

Barra’s alleged lack of knowledge of the issues surrounding the switch recall came back to haunt her when Senator Barbara Boxer of California declared the CEO “didn’t know anything about anything,” and wondered why someone with the resume Barra has could not know anything during the 33 years she had been a part of General Motors.

Other highlights from the Senate hearing include:

  • Barra not committing to when GM’s own investigator, Anton Valukas, could be made available for questioning by the Senate, saying the decision was his to make
  • Barra not knowing how many lawsuits have been filed in relation to the out-of-spec switch, nor having been counseled by GM’s general counsel
  • Barra stating no one involved with the recall still under GM’s employ had been fired, would take action if internal investigation determined as such
  • Senator Dean Heller of Nevada wanting supplier Delphi to testify
  • Barra clarifying her comment to the House about sharing information from the internal investigation
  • GM agreeing to share documents provided by the National Highway Traffic Safety Administration with the subcommittee

Moving over to The White House, the Obama administration aims to do all they can to get a handle on the case before them, as Deputy Press Secretary Josh Earnest informed reporters aboard Air Force One during the President’s visit to Ypsilanti, Mich.:

The National Highway Traffic Safety Administration — or NHTSA — has opened a formal investigation to whether GM shared the information they had about this issue as quickly as they should. Secretary Foxx has also asked the inspector general of the Department of Transportation to conduct an audit to provide a single, comprehensive review of NHTSA’s work in this case.

Finally, The Detroit News posits that Barra’s legacy — and that of General Motors — would long be haunted by nine words uttered by an unknown GM engineer in 2005 over fixing the out-of-spec switch: “None of the solutions represents an acceptable business case.”

On the lawsuit front, attorney Dana Taschner — one of the lawyers involved in the 15 lawsuits filed in federal court on behalf of affected Chevrolet Cobalt owners — wants the cases consolidated and sent before U.S. District Judge James Selina in Santa Ana, Calif., according to Bloomberg. Tascher’s reasoning is that Selina, who is presiding over the cases linked to Toyota’s unintentional acceleration debacle, is the right judge for the job of taking GM to task:

The scope of the expanding recall and number of cars and consumers involved will result in a high volume of lawsuits filed in multiple jurisdictions warranting coordinated or consolidated proceeding.

Detroit Free Press reports safety advocate and chairman emeritus of consumer advocacy group Public Citizen Joan Claybrook is calling for reform from both GM and the NHTSA. Regarding the former, Claybrook believes Barra “has more power than any GM executive probably ever had,” and could lead the reform path toward a focus on safety over costs.

As for the latter, Claybrook — who led the agency between 1977 and 1981 — wants the NHTSA to have more resources available to do its duty to the public, change the complaint-filing process for ease-of-use by consumers, and be granted the authority to purse criminal charges against automakers who fail to recall dangerous products.

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Leaked Documents Link Anti-Union VW Incentive Offer To TN Governor’s Office http://www.thetruthaboutcars.com/2014/04/leaked-documents-link-anti-union-vw-incentive-offer-to-tn-governors-office/ http://www.thetruthaboutcars.com/2014/04/leaked-documents-link-anti-union-vw-incentive-offer-to-tn-governors-office/#comments Wed, 02 Apr 2014 14:15:09 +0000 http://www.thetruthaboutcars.com/?p=786417 092112_WEB_a_VW_Sign_t618

Leaked documents linked to the United Auto Workers battle for the Volkswagen plant in Chattanooga, Tenn. point to a connection between Governor Bill Haslam and the German automaker regarding a $300 million incentive in exchange for over 1,300 jobs at a proposed SUV plant within the state.

WTVF-TV reports the incentives were contingent “to works council discussions between the State of Tennessee and VW being concluded to the satisfaction of the State of Tennessee.” By the time Volkswagen entered into election talks with the UAW in January, however, the Haslam administration formally notified the automaker that it was withdrawing the offer, citing that it had kept the offer on the table past the 90-day window normally reserved for incentives when the incentive in question had no such expiration date.

Though Haslam has denied any such connection to the incentive — dubbed “Project Trinity” — U.S. Senator Bob Corker claimed as early as February of this year that the offering would be made should the workers at the Chattanooga plant vote against representation by the union.

As for the UAW, organizer Gary Casteel stated the following in response to whether the now-public documents were a game-changer in the union’s appeal to the National Labor Relations Board over the election results:

To me, it puts pressure on the state to do what they should have done in the first place — and that’s give the incentives with no strings attached, just like they would any other company, union or non-union.

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Barra, Friedman Testify Before US House Committee http://www.thetruthaboutcars.com/2014/04/barra-friedman-testify-before-us-house-committee/ http://www.thetruthaboutcars.com/2014/04/barra-friedman-testify-before-us-house-committee/#comments Wed, 02 Apr 2014 14:00:59 +0000 http://www.thetruthaboutcars.com/?p=786393 Mary Barra

General Motors CEO Mary Barra and National Highway Traffic Safety Administration acting administrator David Friedman both testified before the U.S. House Energy and Commerce Committee in the first of two congressional hearings focused on GM’s 2014 recall of an ignition switch whose issues the automaker nor the agency chose to act upon in a swift manner in the decade leading up to the recall.

The Detroit News reports the hearing between the committee and Barra lasted two and a half hours, and while the atmosphere was calm for the most part, the elusive answers Barra gave to some questions proved frustrating to the bipartisan committee. A possible reason for the vague responses provided by Barra: Any incorrect answers could come back to haunt the company via a charge of misleading Congress by the Justice Department, who is already conducting an investigation into GM’s handling of the recall.

She also pleaded her case for patience from the federal government while the internal investigation into the recall continues, and repeatedly stood by her talking points throughout the questioning. However, when the committee asked if GM would commit to delivering the final report from the internal investigation to Congress, Barra said her company would turn over “what’s appropriate.”

Meanwhile, she revealed GM had hired attorney Kenneth Feinberg to guide the company’s executives for the next 30 to 60 days into deciding how the automaker will proceed to do “the right thing” by their customer base. Feinberg, who helped establish compensation funds for those affected by 9/11, the Boston Marathon bombing and the BP/Deepwater Horizon oil spill, may direct GM to create such a fund for affected owners whose vehicles were involved in crashes prior to the company’s bankruptcy filing in 2009, though Barra said she couldn’t commit to such a fund under questioning, opting to let Feinberg find “the best way forward.”

Following Barra’s testimony, Friedman took his turn before the House committee, defending his agency’s decision not to move forward with a formal investigation into the ignition switch issue, citing lack of data from General Motors in 2007.

He also explained that the NHTSA had voiced concerns about a number of problems GM hadn’t disclosed, such as the silent part-swap in April 2006 or the automaker’s talks with Delphi over air bags. In turn, the committee asked Friedman why his agency missed a number of red flags and failed to connect the dots in what the agency did learn from their dealings with GM. He said his agency followed proper protocol in its final decision in that there was insufficient information to press forward with a formal investigation. Friedman added that the NHTSA aims to improve this process, as well as increasing penalties for actions such as those demonstrated by GM.

The families affected by the recall witnessed the proceedings from the back of the hearing room, hoping to receive satisfactory answers from Barra as reminders of what the automaker’s poor choices had cost them hung above their heads. One of the affected, Mary Ruddy of Scranton, Penn., put it thusly:

I did not care for the answers from Ms. Barra. I thought she was very evasive, and if she’’s that evasive with the United States government… then how can we expect them to be honest with the general public.

Ruddy’s husband, Leo, also bemoaned Barra’s tactics before the committee, summing up the experience as if “it was like talking to Sgt. Schultz ["Hogan's Heroes"] — ‘I know nothing.’”

The Ruddys were among the families who met with members of Congress before a press conference calling for the establishment of a victims’ compensation fund, pulling affected vehicles off the road, strengthen current auto safety legislation, and a criminal investigation of GM by the Justice Department.

Finally, though the Chevrolet Silverado was knocked off of its pedestal by Ram’s offerings since 1999, Automotive News reports the fullsize pickup and its GMC Sierra twin helped boost GM’s overall U.S. light-duty vehicle sales in March by 4 percent to 256,047 vehicles. Overall retail sales also gained in March, rising 7 percent compared to the previous year.

As for the twins, Chevrolet’s sales rose 7 percent in March while GMC experienced a 21 percent growth, all of which is setting the place for upcoming product launches later this year, according to GM U.S. vice president of sales operations Kurt McNeil:

GM’s retail sales, like the weather and the economy as a whole, have been on an improving trend since early February. We expect to see solid economic growth in the months ahead, with the job market, household income and consumer spending all showing positive signs.

It is a strong backdrop for the launch of our all-new heavy-duty pickups, large SUVs and other new products, like the Cadillac ATS coupe coming this summer.

Transaction prices also went up in March, coming out on a record average of $34,000, as well as a 5 percent increase in commercial fleet sales; fleet sales fell by 5 percent in a planned reduction by the automaker.

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GM Adds 824k Vehicles To Recall http://www.thetruthaboutcars.com/2014/03/gm-adds-824k-vehicles-to-recall/ http://www.thetruthaboutcars.com/2014/03/gm-adds-824k-vehicles-to-recall/#comments Mon, 31 Mar 2014 13:00:22 +0000 http://www.thetruthaboutcars.com/?p=785137 2009_Saturn_Sky_Redline_Ruby_Red_Limited_Edition

Over the weekend, General Motors called back an additional 824,000 vehicles whose ignition switches could slip out of the “on” position, cutting power to the engine, brakes and air bags. According to Automotive News, the recall now affects Chevrolet Cobalts and HHRs, Pontiac G5s, and Saturn Ions and Skys made between 2008 and 2011. The reasoning is that while those vehicles were made after the switch was improved in April 2006, some 90,000 vehicles may have received the faulty switch during repairs.

In addition, Detroit Free Press reports GM issued a stop sale order and recall of 190,000 2013 – 2014 Chevrolet Cruzes in the United States and Canada fitted with the gasoline-powered 1.4-liter Ecotec turbo-four. The right front axle half shaft could “fracture and separate without warning” under normal driving conditions, according to the automaker.

Meanwhile, 490,200 2014 Chevrolet Silverados and GMC Sierras, as well as 2015 Chevrolet Tahoes and Suburbans and GMC Yukon XLs and Yukons, are being recalled in order to fix a transmission oil cooler line that, if not “securely seated and transmission oil leaks from the fitting,” may cause oil to spill onto hot surfaces, resulting in a fire such as the one experienced earlier this month during a test drive in California earlier this month.

The few who purchased or leased a 2014 Cadillac ELR may also need to bring their vehicles in for service. Detroit Free Press says ELRs made between Sept. 26, 2013 and Valentine’s Day 2014 without adaptive cruise control may suffer from an electronic stability system unable to perform certain diagnostics that would alert the driver if the system was either partially or fully disabled, which then could lead to a crash. GM will recalibrate the electronic brake control module for free in their recall notice, set to be issued April 17.

Speaking of Cadillac, Automotive News reports brand chief and former head lobbyist Bob Ferguson has been sent to Washington, D.C. ahead of two separate congressional hearings over the 2014 ignition recall crisis, helping the automaker to prepare. Though insiders have speculated Ferguson could once again return to D.C. permanently as GM’s vice president of of global public policy, the automaker offered nothing more than what Ferguson was doing for them currently.

Bloomberg, Automotive News and Detroit Free Press report GM has had a difficult time with the ignition switch used in their small cars. The switch had been altered three times in five years, beginning with the inability to start 2003 – 2006 Saturn Ions thanks to a defect related to the car’s Passlock theft-deterrent system. The fix, which included a new part number, led to the headache currently being experienced by the automaker.

However, the fix that would have cured the new switch’s ability to accidentally shut vehicles down — such as the Chevrolet Cobalt — was cancelled in 2005 by GM on the words of a project engineering manager who cited costly tooling and piece prices as reasons not to press forward. The part was approved by GM in 2002, despite Delphi — who made the part for GM — noting the switch did not meet specification, nor did the 2006 ignition that, while preventing the slip issue linked to 31 crashes and 13 deaths, was still below what General Motors had requested.

As for the agency responsible for pushing this issue into the spotlight much sooner than 2014, Detroit Free Press says a review by the Associated Press of complaints made to the National Highway Traffic Safety Administration between 2005 and 2014 found 164 drivers of 2005 – 2007 Chevrolet Cobalts experienced their vehicle shutting down with no warning; only the Toyota Corolla of the same vintage — recalled during the government’s investigation into Toyota in 2010 — saw more complaints.

In addition, an unnamed official who headed the NHTSA’s Defects Assessment Division recommended in 2007 an investigation as to why air bags in 2003 – 2006 Cobalts and Ions didn’t deploy, stating complaints made to the agency in 2005, along with early warning data gathered from related repairs and injuries, justified such action.

Bloomberg adds the cars linked to the faulty switch were marketed to first-time drivers, whose inexperience behind the wheel may have added to the chain of events leading to the number of crashes and fatalities documented thus far. Though GM stated in 2005 the driver could regain control by shifting to neutral and restarting, auto-safety experts and driving instructors, such as American Drivers Traffic Safety Education Association CEO Allen Robinson, said the scenario presented by the ignition failure would be hard to manage by most drivers:

It’s going to be a real problem and most people are not going to know how to deal with it.These sorts of mechanical failures are so infrequent that you can’t really prepare people for them.

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Car Guys & Gals You Should Know About – Roy Lunn’s Resume: Ford GT40, Boss 429 Mustang, Jeep XJ Cherokee, AMC Eagle 4X4 and More! http://www.thetruthaboutcars.com/2014/03/car-guys-gals-you-should-know-about-roy-lunns-resume-ford-gt40-boss-429-mustang-jeep-xj-cherokee-amc-eagle-4x4-and-more/ http://www.thetruthaboutcars.com/2014/03/car-guys-gals-you-should-know-about-roy-lunns-resume-ford-gt40-boss-429-mustang-jeep-xj-cherokee-amc-eagle-4x4-and-more/#comments Sun, 30 Mar 2014 14:00:05 +0000 http://www.thetruthaboutcars.com/?p=783073 Roy Lunn (on right) receiving an award from the Society of Automotive Engineers for the Eagle 4X4

Roy Lunn (on right) receiving an award from the Society of Automotive Engineers for the Eagle 4X4

You may not have heard the name Roy Lunn, but undoubtedly you’ve heard about the cars that he guided into being. You think that’s an exaggeration? Well, you’ve heard about the Ford GT40 haven’t you? How about the original XJ Jeep Cherokee? Lunn headed the team at Ford that developed the LeMans winning GT40. Later as head of engineering for Jeep (and ultimately VP of engineering for AMC) he was responsible for the almost unkillable Cherokee, Jeep’s first unibody vehicle, a car that remained in production for over two decades with few structural changes and could be said to be the first modern SUV. In addition to those two landmark vehicles, Lunn also was in charge of the engineering for  two other influential cars, the original two-seat midengine Mustang I concept and the 4X4 AMC Eagle. If that’s not an impressive enough CV for a car guy, before Ford, he designed the Aston Martin DB2 and won an international rally. After he retired from AMC, he went to work for its subsidiary, AM General, putting the original military Humvee into production. Oh, he also had an important role in creating one of the most legendary muscle cars ever, the Boss 429 Mustang. So, yeah, you should know about Roy C. Lunn.

astonmartindb2_r

Aston Martin DB2. Full gallery here.

Roy C. Lunn was born in 1925 in England. I haven’t been able to find anything out about his childhood, but he must have been a bit of a prodigy. He  earned mechanical and aeronautical engineering degrees and served for two years during World War II in the Royal Air Force, training as a pilot, all by the time he was a legal adult. In addition to his engineering degrees he also had training as a toolmaker and designer, and in 1946 he got his first job in the automotive industry, working for AC cars as a designer at the age of 21. His talent caught the notice of David Brown, who hired him a year later to be assistant chief designer at Aston Martin. Brown put him in charge of the DB2 program. By 1949, he was at Jowett, where he helped prepare the Jupiter sports car for production and had a hand in the development of one of the earliest fiberglass bodied cars. A competitive driver, he shared the saloon class victory co-driving a Jupiter Javelin for Marcel Becquart in the 1952 RAC International Rally of Great Britain. You can see Becquart racing that car in that rally starting at about 1:55 of this video:

Click here to view the embedded video.

After that somewhat peripatetic early career, as Lunn approached his 30s, he settled down and hired in at Ford in 1953 and was put in charge of starting up Ford of England’s new research and development center in Birmingham. His team there developed the original prototype of what would be the 105E Anglia, a critical car to the postwar success of Ford in the UK. Moving to Ford’s Dagenham works, he took on the job of product planning manager for Ford of England and ushered the Anglia into production.

105E Ford Anglia.

105E Ford Anglia.

Emigrating to the United States in 1958, Lunn was made manager of Ford’s Advanced Vehicle Center in Dearborn. He supervised a number of projects including Ford’s first front wheel drive vehicle, the Cardinal, which was developed into the Ford of Germany’s Taunus . While the Anglia and Taunus were important cars for Ford in Europe, they’re both sedans. Lunn’s role in the development of the Mustang I concept is probably of more interest to the average car enthusiast.

P4 Ford Taunus 12M

P4 Ford Taunus 12M

In the early 1960s, an idea that had been percolating around Detroit since Chevy ad man Barney Clark first proposed that GM build a small, sporting four seater with classic long hood short deck proportions finally got the attention of some higher-ups at Ford. Lee Iacocca gave the go ahead to the development of a small sporty car designed to appeal to young adults. Because of Lunn’s experience in racing and as a chief designer, his team was tasked with designing a chassis and mechanical components to underpin a design based on sketches by a young Ford designer named Phil Clark (who quite likely also originated the Mustang name and galloping pony badge). Ford senior designer John Najjar, in an oral history given to the University of Michigan, Dearborn, described Lunn’s role in creating the first Mustang concept car:

Roy Lunn designed all the tubular structure, the suspen­sion, the engines. He got all that equipment built and shipped out to [a fabricator on] the West Coast. It was all put together, we finished our clay model in something like eight weeks’ time, and, I guess, Roy had something like sixty days to build an operable vehicle. To see that thing go from an idea to finished product was an exciting time.

Ford Mustang I concept. Full galleries here and here.

Ford Mustang I concept. Full galleries here and here.

You can read Lunn’s own account of the development of what is now known as the Mustang I. In January of 1963, he published a technical paper with the Society of Automotive Engineers titled, The Mustang – Ford’s Experimental Sports Car. While the four cylinder, two seat, midengine Mustang I didn’t really directly influence the production Mustang, it did end up influencing early production midengine cars like the Lotus Europa and Fiat X/19. Using the V4 engine and transaxle from the Taunus, the Mustang I concept was possibly the first midengine car to move a front wheel drive powertrain to behind the driver. Indirectly, positive consumer response to the Mustang I when it was on the show circuit convinced Ford executives to go forward with the production pony car. 

By 1962 Lunn had became a U.S. citizen. Also, by then Henry Ford the second had been rebuffed in his effort to buy Ferrari. Despite the American car manufacturers’ public disavowal of racing in the late 1950s and early 1960s, the Deuce wanted Ford to win, bankrolling efforts in NASCAR, and at Indianapolis with Lotus (a relationship that would also bear fruit in Formula One as the Cosworth Ford DFV engine). When Ferrari wouldn’t sell, HFII decided to beat him at his own game, at LeMans, a race important to Ferrari’s image and the racing world’s biggest stage.

The popular account of the history of Ford’s iconic 1960s racer is that to save time, Eric Broadley’s Lola Mk 6 was developed into the Ford GT40, which itself became the Mk II and Mk IV cars that won four years in a row at LeMans, 1966-69. According to the Ford engineers involved, though, while it was true that Ford used Broadley’s shop and design to jump start their endurance racing effort, the Ford GT40 was not a Lola. To manage Ford’s new GT racing effort, Lunn temporarily moved back to England, joining former Aston Martin factory racing team manager John Wyer at Broadley’s Lola, then little more than a garage. However, while Broadley’s skill at fabrication was respected, he soon was edged out and went on to develop his own very successful (and rather beautiful) competition car, the Lola T70.

One of the original Gulf livery race cars, this GT40 Mk II won LeMans as a privateer in 1968 and 1969. Full gallery here.

One of the original Gulf livery race cars, this GT40 Mk II won LeMans as a privateer in 1968 and 1969. Full gallery here.

In the Spring 1964 issue of Automobile Quarterly, an article based on another of Lunn’s SAE papers said, concerning Ford’s LeMans effort, ”By July, 1963, a basic design and style had been established at Dearborn…”

Ford project engineer Bob Negstad, whose own resume includes designing the suspension of the Shelby Daytona Coupe, worked on the Ford GT project from the beginning and he was sent to the UK to join Lunn and Wyer at Broadley’s shop. Negstad, in an interview quoted at How Stuff Works, though, was adamant that the GT40′s design was Ford’s not Lola’s, though he acknowledged that Broadley did much of the prototype’s original build. A ”brilliant fabricator”, is how Negstad described Broadley, who was trained as an architect, not an engineer.

“Broadley was technically naive,” Negstad said, “a trial-and-error man,” and the Lola shop was a “terribly old, obsolete building lit by a single 40-watt bulb.” He said that Ford was attracted to Broadley to save time. His ability to quickly build what they wanted, along with having a car of similar layout to Dearborn’s plans that could be used as test mule as they refined their own design was what put Ford and Lola together.

The Ford GT was introduced to the press and the public at the New York Auto Show in the spring of 1964. To say it had teething problems would be an understatement. Henry Ford II was increasingly embarrassed by the car’s lack of racing success, but he smartly turned the management of the factory team over to Carroll Shelby, who helped develop the GT40 into a dominant race car as well as putting together a professional racing team. Finally, in 1966, the GT40 finished 1-2-3 at LeMans. Again, Lunn published a technical paper with the SAE, in 1967, this time on the GT40′s development titled ”Development of Ford GT Sports-Racing Car, Covering Engine, Body, Transaxle, Fuel System, Suspension, Steering, and Brakes.”

Because of the involvement of Broadley and the cars fabrication in the UK there may be some debate if the 1966 GT40 was the first “American” car with an overall win at LeMans. The next car that Ford took to LeMans, the GT40 Mark IV, was all American, designed by a team headed by Lunn in Dearborn, built at Kar Kraft in Brighton (Michigan, not England), and driven to victory by Dan Gurney and A.J. Foyt.

The 1-2-3 finish at LeMans in 1966, with that famous staged photograph showing all three cars approaching the finish line, was cause for celebration but Lunn was already focused on a new, lighter car. Two candidates were evaluated, a prototype with a tub made of aluminum sheet, designed and fabricated by McLaren Racing Ltd, and an in-house project known as the J-Car (for meeting the standards in Appendix J in the rule book), with a tub made of lightweight 1/2 thick aluminum honeycomb sandwiched between two aluminum panels, with everything bonded together. Lunn, a forward thinking engineer, liked the more modern and very stiff honeycomb material and he convinced his superiors at Ford to go in that direction.

The J-Car and GT40 Mk IV were fabricated using lightweight sandwiched aluminum honeycomb.

The J-Car and GT40 Mk IV were fabricated using lightweight sandwiched aluminum honeycomb.

The first prototype, J-1, had a chassis weight of only 86 lbs, with a total vehicle weight of 2,660 lbs, coming close to meeting Lunn’s goal of a 300 lb weight reduction from the GT40 Mk II. A second prototype, J-2, was built, with Kar Kraft of Brighton, Michigan continuing with the fabrication as Ford had sold off Ford Advanced Vehicles. Unfortunately, the very talented driver, Ken Miles, was killed in a testing accident caused by mechanical failure in the J-2 car. Lunn, working with Ford chassis engineer Chuck Mountain and master fabricator Phil Remington, continued to develop the J-Car, creating a new body with a Can Am style tail, a longer nose on the front of the car and a new roofline that flowed more smoothly, allowing the use of a back window. The restyled car was renamed the GT40 Mark IV. Cars were prepared for the 1967 LeMans race, with J-5 being assigned to American drivers Gurney and Foyt. Henry Ford II was happy with the 1-2-3 finish in 1966, but he wasn’t thrilled about that car’s British origins or the fact that the drivers of the winning car, Chris Amon and Bruce McLaren, were both New Zealanders.

Note the "Gurney bubble" over the driver's seat in the 1967 LeMans winning Ford GT40 Mk IV. Full gallery here.

Note the “Gurney bubble” in the roof over the driver’s seat in the 1967 LeMans winning Ford GT40 Mk IV. Full gallery here.

J-5 needed some special bodywork that the other Mk IVs didn’t have. Dan Gurney is a rarity, a tall racer, and to give his helmet clearance, Kar Kraft had to build in a Zagato style bump in the roof, today known as the “Gurney bubble” that makes the LeMans winner immediately recognizable. Gurney celebrated by spraying the winners’ circle with champagne, initiating a racing tradition that continues to this day.

For 1968, an engine rules change meant Ford could no longer use their big 7 liter / 427 cubic inch big block. Having made his point to Enzo Ferrari and the racing world, the Deuce shuttered Ford’s endurance racing effort, selling the team to JW Engineering, where John Wyer was one of the principals. Wyer managed to convince Gull Oil’s CEO, who had some experience racing his own GT40, to sponsor the team. Gulf had recently acquired a subsidiary that fortuitously used a similar corporate color scheme to Gulf’s orange and dark blue. It was decided that the subsidiary’s powder blue and orange made a better livery for racing cars. It indeed looks great but I have to wonder that if a car wearing those colors had not won LeMans two years running, in 1968 and 1969, 45 years ago, if today we’d still consider that livery so ideal for racing cars.

Designing and building cars that won four years in a row at LeMans would make any automotive engineer’s career a successful one. Lunn’s successful management of Ford’s LeMans effort, though, was just one of his notable accomplishments.

With Ford ending its factory LeMans effort, Lunn turned his attention back to production cars. As the 1960s came to a close, muscle cars were still popular and Detroit was undergoing one of its periodic horsepower wars. Having had success in Trans Am racing and in the showroom with the Boss 302 Mustang, Ford executive Bunkie Knudsen decided to up the ante and went ahead with putting Ford’s biggest performance engine, the big block based 429 cubic inch Cobra Jet V8, into the Mustang. The 429 CJ isn’t just a big block engine, it’s a physically large motor, with spark plugs inserted through the exceptionally wide valve covers. To shoehorn such a big engine in something based on the compact Falcon took some doing. The entire front end of the car had to be reengineered, with narrower shock absorber towers and a different crossmember. The work was jobbed out to Kar Kraft, but the modifications were done at Roy Lunn’s direction.

Roy Lunn was in charge of shoehorning that big and wide 429 Cobra Jet into the Boss 429 Mustang. Full gallery here.

Roy Lunn was in charge of shoehorning that big and wide 429 Cobra Jet engine into the Boss 429 Mustang. Full gallery here.

The Boss 429 would almost be Ford’s last hurrah for the muscle car era. The next iteration of the Boss nameplate would be the larger and slower 1971 Boss 351 Mustang. Perhaps Lunn saw the writing on the wall for the muscle era, with emissions controls starting to be mandated, or perhaps he looked at off-road, as opposed to on-track, performance for his next challenge, or maybe he was just offered more money and a bigger title, but for whatever reason, in 1971, Lunn left Ford to become director of engineering for Jeep, which had recently been acquired by American Motors Corporation.

Lunn’s most notable contributions at AMC reverberate until today. He helped invent the modern SUV and if you drive something with all wheel drive that isn’t truck based, you can thank him as well. The first of those contributions was the original Jeep Cherokee, internally known as the XJ. The XJ platform was Jeep’s first attempt to build a unibody vehicle. Concerned that traditional unibody architecture would not be up to the rigors of being a trail rated Jeep, Lunn’s team came up with what AMC marketers would call the Uniframe assembly. Instead of “body on frame”, the XJ Cherokee was more like body welded to frame. The Uniframe more or less involved integrating a traditional ladder frame into a unibody top hat, welding the two into one very strong structure. Because of those beefy frame rails, to this day some people still believe that the XJ used BOF construction.

Lunn's team designed a unibody for the XJ Cherokee so strong they were able to cut it up to make the Comanche pickup truck. Full gallery here.

Lunn’s team designed a unibody for the XJ Cherokee so strong they were able to cut it up to make the Comanche pickup truck. Full gallery here.

Some have described the Cherokee as being overengineered, which may help explain the Jeep SUV’s legendary durability, on the road and as a production vehicle. Kiplingers listed the XJ Cherokee as  one of “10 cars that refuse to die”, with many late 1980s and early 1990s models reaching 200,000 miles and more when that wasn’t commonplace, particularly with American made vehicles. Starting being built in 1984, it stayed in production in the United States into the 21st century. It lasted even longer in China. The Cherokee was the first American branded car to be made in China, the product of Beijing Jeep, also the first joint venture by an American car company in China. After AMC was acquired by Chrysler, they continued making the Cherokee in China, where it stayed in production as the Jeep 2500 until 2005.

uniframe

The Cherokee’s architecture was so strong that when AMC decided to make a small truck to compete with the Ford Ranger, the Chevy S-10 and the import trucks, they were able to hack off the back half of the Cherokee’s body, add an X-shaped reinforcement between the frame rails, and bolt on a conventional separate pickup truck bed without losing structural integrity.

The XJ Cherokee didn’t just live a long production life. It’s also said by some to be responsible for the continued survival of Jeep today. The Cherokee’s sales success convinced Chrysler that AMC had viable product that didn’t overlap with vehicles in Chrysler, Plymouth and Dodge showrooms, resulting in Chrysler buying AMC to get Jeep, which continues to thrive.

Lunn’s other major contribution to the automotive world while working at AMC, the Eagle 4X4, accomplished many firsts. Today you can’t sell a luxury car north of the Mason-Dixon line if you don’t offer all wheel drive and now that Fiat Chrysler is joining Subaru with a sub $30,000 2015 Chrysler 200 AWD model, we’re likely going to see AWD proliferate in bread and butter mass market sedans. The Eagle was the first American car based vehicle with all wheel or four wheel drive. It also could be described as the first crossover, a slightly raised passenger car capable of some soft-roading.

Rlnp11904

The Eagle started out as a skunk works project of Lunn and his team. The first drawings were done in the basement of Lunn’s Ann Arbor home (some very significant cars started out in designers’ and engineers’ basements and kitchens, by the way). Jeep had earlier introduced the first true production full-time four wheel drive system, offering it as an option on their utility vehicles. Based on the Ferguson Formula (FF) full-time all-wheel-drive system invented by Britain’s Ferguson Research Ltd, and developed by AMC/Jeep and the New Process Gear company, the first “QuadraTrac” system used a conventional differential between the front and rear axles. It could be engaged on the fly while driving on pavement, or just left in 4WD mode all the time.

Rlnp11906

Lunn’s team took a Concord station wagon, jacked it up a few inches, and installed one of Jeep’s Quadra-Trac systems. AMC chairman Gerald C. Meyers saw it and later recalled, “our initial reaction to Lunn’s concoction was, ‘What the hell is it?’ The body was raised an extra four inches for transfer-case clearance and the wheel wells were wide open.” The second oil crisis, in 1979, had caused Jeep sales to dip and Meyers changed  his mind, seeing the concept as bridging the price gap between AMC’s economy cars and their less fuel efficient Jeeps, while giving consumers an option between the lower priced Subaru AWD vehicles and more expensive truck based four by fours from the domestic automakers. It also bridged the gap between two wheel drive cars and hardcore four wheel drive trucks. Muscular plastic fender flares bridged the large gap between the tires and the wheel wells and more body cladding visually lowered the sills.

AMC Eagle 4X4 Wagons. Full galleries here and here.

AMC Eagle 4X4 Wagons. Full galleries here.

As mentioned, Lunn and his engineers used Jeep’s first Quadra-Trac system on their prototype, but a later transfer case from New Process replaced that conventional differential with a unit that used 42 discs spinning in a silicone based viscous fluid. That allowed differential action with less drag (and thus better fuel economy) than conventional units, making it more suitable for a passenger car. Drivetrain drag causing poorer fuel economy has always been an issue with four and all wheel drive systems. The latest AWD system that Fiat Chrysler is installing in the new Jeep Cherokee has a mode that allows the rear axle to freewheel when the trucklet is operating in 2WD. My guess is that Lunn would approve.

Lunn with the chassis and drivetrain from an AMC Eagle 4X4.

Lunn with the chassis and drivetrain from an AMC Eagle 4X4.

At the rear of the Eagle’s automatic transmission is a single speed NPG119 transfer case which sends power to the front and rear of the car, using a Morse Hy-Vo chain to spin the front driveshaft. The viscous couplings in the transfer case are sensitive to velocity and allow slip between the two driveshafts, allowing them to spin at different speeds. What makes everything work is a fluid made by Dow Corning that some call “silly putty” and others call “honey-like”. It is a “fluid-shear force” silicone fluid that has high shear and heat resistance, allowing consistent performance from 40 below zero to over 400 degrees F. The viscous coupling also provided some anti-skid capabilities because the system tends to equalize driveshaft speeds. The front differential was mounted via a bracket to the left side of the engine crankcase and with the lifted suspension, Lunn and his engineers were able to run the right side half shaft underneath the oil sump, allowing the Eagle to retain the Concord’s independent front suspension.

The net result is that torque is transferred to the axle with the most traction, on wet or dry pavement, or, for the matter, on unpaved roads as well. Though it’s tempting to say that the Eagle was ahead of its time, that idiom is usually reserved for market failures. The Eagle, and later the hatchback Spirit based 4X4 were moderate successes for AMC. Of course the Eagle was indeed ahead of its time, anticipating jacked up station wagons with all four wheels being powered, like the Subaru Forester, the Audi Allroad and the Volvo XC models.

Jeep_5_millionth_4.0_engine_r

As was his practice, Lunn contributed a technical paper on the Eagle to the SAE. It should be noted that at AMC, he also had a hand in the continued development of what began as the AMC inline six and ended up as the Chrysler Jeep 4.0, an engine whose durability matched that of the XJ Cherokee. Five million of those engines were made.

spec_racer_ford_a

Wrapping up his career at AMC, Lunn returned to performance cars after Renault bought American Motors. He was named president of Renault Jeep Sport, in charge of all AMC and Renault racing in the U.S. Part of that job involved the design of cars for a low-cost spec racing series in the SCCA. Some of Lunn’s 500 Spec Racer Renaults are still being raced today in NASA, while his basic design is still being used by SCCA’s Spec Racer Ford series. Returning to his rallying roots, in 1984, Lunn was in charge of the first ever American entry in the Paris-Dakar rally.

humvee

Lunn retired from American Motors Corp in 1985, but that retirement was short lived as he was immediately named VP of engineering for AMC’s AMC General subsidiary, which made mostly buses and military vehicles. The High Mobility Multipurpose Wheeled Vehicle (HMMWV), better known as the Humvee, progenitor of the Hummer, that AM General had designed for military use was approaching production. The company was running into issues getting the Army to issue acceptance approvals and Lunn’s task was to fix those problems and get the Humvee into production.

After an accomplished career that spanned over four decades, Lunn left AMC for good in 1987, retiring to homes in Florida and later in Italy. As far as I’ve been able to determine, he’s still alive. To be perfectly frank, until I started working on a post about one of the original Gulf Oil livery cars, the Ford GT40 that won at LeMans in both 1968 and 1969, I had no idea of Lunn’s involvement in the project. Had that been the only notable car he worked on, he would have been worth profiling, but as you have seen, the GT40 was just one of a number of Lunn’s historic accomplishments. As TTAC’s managing editor, Derek Kreindler, told me when I pitched him the story, “talk about an unsung hero”. Even as I edited and buttoned up this post, I discovered additional significant contributions that Lunn made, like his involvement with the Jeep 4.0 Six. I’m hard pressed to think of many other engineers that had a role in developing so many historically important cars as Roy C. Lunn did. He’s undoubtedly a car guy you should know about.

Ronnie Schreiber edits Cars In Depth, a realistic perspective on cars & car culture and the original 3D car site. If you found this post worthwhile, you can get a parallax view at Cars In Depth. If the 3D thing freaks you out, don’t worry, all the photo and video players in use at the site have mono options. Thanks for reading – RJS

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GM Call Center Sees Double, Upton Prepares For Hearing http://www.thetruthaboutcars.com/2014/03/gm-call-center-sees-double-upton-prepares-for-hearing/ http://www.thetruthaboutcars.com/2014/03/gm-call-center-sees-double-upton-prepares-for-hearing/#comments Fri, 28 Mar 2014 13:16:23 +0000 http://www.thetruthaboutcars.com/?p=782793 Pontiac_Solstice

Automotive News posits an earlier recall would have prevented a majority of fatalities tied to the 2005 – 2007 Chevrolet Cobalt’s ignition switch. According to their research, seven of the eight deaths occurred after April of 2006, when the improved switch was quietly introduced into the supply stream; one of the four fatalities linked to 2003 – 2007 Saturn Ions was found to have occurred after the April 2006 improved part introduction, as well.

Among other findings, only one of the eight Cobalt fatalities did not factor alcohol or seat belts into the equation, two of the eight deaths — one under “Old GM,” one under “New GM” — led to lawsuits that were settled prior to the February 2014 recall, and that some of the families found in their research never had any contact with the automaker.

The findings come from an AN article that examined the timing of various fatalities involving crashes with the Chevrolet Cobalt, with AN’s Nick Bunkley writing

“The research indicates that all of the deaths involved cars built before the switch was redesigned; had GM simultaneously elected to recall the cars, repairs could have been performed before a majority of the fatal crashes happened. It also shows that only one of the 12 deaths occurred after GM emerged from bankruptcy protection in July 2009.”

The Detroit News reports United States Senator Richard Blumenthal of Connecticut penned a letter to General Motors CEO Mary Barra urging her to warn drivers of affected 2003 – 2007 Chevrolet, Pontiac and Saturn products to park their vehicles until the ignition switch linked to the recall is fixed, and the vehicles no longer “present urgent danger” to the general public:

I urge you to issue a stronger warning to drivers of recalled vehicles of the acknowledged risk they are facing, including a warning not to drive recalled cars. This warning should be issued as soon as possible — in advance of your testimony before the subcommittee.

The letter follows a similar call from Texas lawyer Robert Hilliard, who is representing 15 families in a class action suit before federal court, claiming that the public need not even drive the affected vehicles to be affected by the recall. The suit, headed by the Silvas family over loss of resale value in opposition to loss of life as experienced by the other families, will be heard April 4.

Bloomberg reports calls to GM’s Customer Engagement Center in Warren, Mich. — opened in 2013 to improve service and customer retention — have doubled during peak hours since the recall began, as explained by senior vice president for global quality and customer experience Alicia Boler-Davis:

Since GM announced the ignition switch recall, the center has seen more than double the amount of calls during peak times from typical daily call volumes. Up to 100 dedicated, specially trained advisors have been available to quickly assist customers with questions on this issue alone, bringing down the average wait time to less than a minute.

Boler-Davis is among those under the gun by customers and critics alike, Detroit Free Press reports, along with GM vice president of global engineering John Calabrese, global product chief Mark Reuss, and vice president of global safety Jeff Boyer. For her, the customer center is one of the ways GM is hoping to restore confidence in their products:

It shows that we’re available, we’re here to help. We’re wanting to be accessible to them, whether it’s through telephone, whether its through social media, whether they’re wanting to send us e-mails.

The appointment of Boyer to the newly created global safety post also aims to improve the automaker’s image before the general public, according to Reuss:

Jeff is a passionate safety zealot, and he really has been involved with just about every part of the car, including interiors and the computer data engineering of safety.

Back in Washington, D.C., U.S. Representative and House Energy and Commerce Committee chairman Fred Upton of Michigan told Detroit Free Press that he and his colleagues were “very surprised with the revelations that came forward the last couple of weeks” from the various investigations into the recall crisis, and plans to spend the weekend with his staff poring over more than 5,000 documents supplied by GM related to the recall prior to the hearing with Barra and National Highway Traffic Safety Administration acting administrator David Friedman April 1:

I don’t know what the response is going to be. Those questions are going to get asked on Tuesday. We don’t have any predisposed conclusions on where this is going. Everything is on the table. We’re going to find out the answers as we should.

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Gov. Perry Pushing For Direct Sales In Texas To Attract Gigafactory http://www.thetruthaboutcars.com/2014/03/gov-perry-pushing-for-direct-sales-in-texas-to-attract-gigafactory/ http://www.thetruthaboutcars.com/2014/03/gov-perry-pushing-for-direct-sales-in-texas-to-attract-gigafactory/#comments Thu, 27 Mar 2014 13:09:14 +0000 http://www.thetruthaboutcars.com/?p=782065 Texas Governor Rick Perry circa January 2014

With the possibility of bringing Tesla’s Gigafactory — and its 6,500 jobs — to Texas, Governor Rick Perry is actively pushing for legislation which would do away with the direct-sales ban currently preventing the EV automaker from doing more than presenting their wares to local customers.

The Dallas Morning News reports Perry took his stance on the issue to FOX Business’ “Opening Bell” earlier this week, explaining that it was in the state’s “best interest” to revisit what he says some people would view as “antiquated protections” for Texas’ franchise dealership network:

The people of Texas will say, ‘We don’t need to be protected. We like to be able to negotiate straight away.’ I think it’s time for Texans to have an open conversation about this, the pros and the cons. I’m gonna think the pros of allowing this to happen outweigh the cons.

Currently, Tesla has two showrooms in Houston and Austin, with a third soon to arrive in Dallas. As of this writing, however, none of the trio can do more than provide visitors with information about Tesla’s lineup, prompting interested parties to complete their purchase online or in a state more favorable to direct sales.

The move to allow direct sales would add another incentive for Tesla to build their Gigafactory in Texas, which Perry proclaims would give his state a much-desired cachet. Dallas-Fort Worth Metropolitan New Car Dealers Association president Lee Chapman, however, disagrees with the kind of incentive Perry wishes to use in luring Tesla:

The system we have was put into effect by the state to protect consumers and dealers. [Dealers are] always open to discussion, [but] at this point, we have not been given anything to discuss other than the right to sell cars here in exchange for a plant.

 

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GM To Go Before Senate Panel, As Allegations Of Hardball Tactics Surface http://www.thetruthaboutcars.com/2014/03/gm-to-go-before-senate-panel/ http://www.thetruthaboutcars.com/2014/03/gm-to-go-before-senate-panel/#comments Wed, 26 Mar 2014 13:16:50 +0000 http://www.thetruthaboutcars.com/?p=781289 Chevrolet Cobalt Sedan

General Motors CEO Mary Barra and National Highway Traffic Safety Administration acting director David Friedman will testify before the United States Senate on April 2 about their respective parties’ handling of the ongoing GM ignition recall crisis just as two senators introduced a bill expanding public access to safety filings made by all automakers to the federal government.

Automotive News reports Barra and Friedman will take questions from the Senate Commerce Committee’s Consumer Protection panel. Their joint appearance follows their first before the U.S. House Energy and Commerce Committee the day prior. Both hearings are expected to seek answers to questions surrounding how both GM and the NHTSA responded in the move to recall the defective ignition switch found in a handful of 2003 – 2007 GM models.

Automotive News also says Senators Ed Markley of Massachusetts and Richard Blumenthal of Connecticut introduced a bill which would require automakers to submit the first document of a fatality involving one of their products to NHTSA, who would then make said document and subsequent documents available to the public through an easy-to-use database. The bill reinforces the 2000 TREAD Act’s requirement of early-warning reports to be submitted to the agency, and to make that information accessible to the public.

Meanwhile, The New York Times reviewed 19 of 23 reported fatalities linked to the defective ignition switch, and found that GM either dismissed their link to the fatalities in question, or settled out of court under the veil of confidentiality. In one case, threatened to sue for reimbursement of legal fees unless lawsuits were dropped

One of the suits in question, settled between Georgia lawyer Lance Cooper and GM in 2013 — is finding new life as part of a 12-way lawsuit filed in San Francisco against the automaker over allegations that not every car affected by the defective part has been recalled, according to Automotive News. At the time of the suit, Cooper obtained hundreds of documents related to the part, along with depositions from a handful of engineers responsible, some of which are now making a public appearance in the new suit for the first time.

Separately, USA Today reports Alabama resident Steve Smith and attorney Jere Beasley have filed a lawsuit on behalf of Smith’s daughter, Aubrey Wallace Williams. Williams lost her life late last year when her 2006 Cobalt’s ignition switched off, causing loss of control that led to her crossing in front of an 18-wheel log truck. The suit comes after the recall news prompted a new investigation into Williams’ accident.

Finally, Detroit Free Press reports Niharika Taskar Ramdev will become GM’s new treasurer, who will oversee the automaker’s capital market activities and investor relations. Ramdev will report to newly appointed CFO Chuck Stevens, who says her main focus will be on “maintaining [GM's] fortress balance sheet, achieving investment grade credit ratings and developing a sustainable capital allocation strategy.”

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Congressional Hearings Loom As Switch Swap Raises Questions At GM http://www.thetruthaboutcars.com/2014/03/congressional-hearings-loom-as-switch-swap-raises-questions-at-gm/ http://www.thetruthaboutcars.com/2014/03/congressional-hearings-loom-as-switch-swap-raises-questions-at-gm/#comments Tue, 25 Mar 2014 13:30:40 +0000 http://www.thetruthaboutcars.com/?p=780281 800px-Pontiac_G5_coupe

General Motors is facing two separate lawsuits related to failures of the ignition switch recalled last month, while also preparing to bring their case before the U.S. House Energy and Commerce Committee next month, led by a representative who honed his skills upon Firestone.

Meanwhile, reports of a quiet swap between the defective ignition switch and an improved switch in 2006 – a swap that may have violated internal protocols -may have serious repercussions for GM and now-bankrupt supplier Delphi.

Finally, a test drive gone wrong results in a GMC Yukon left to burn, whose prompt investigation is only the beginning of a long learning process in how GM handles safety in the future.

Reuters and Just-Auto report two lawsuits were filed against GM over the weekend in Minnesota and California. The former, filed in state court on behalf of three teenage girls severely injured or killed in a 2006 crash involving a 2005 Chevrolet Cobalt, is considered to be the first wrongful death lawsuit since the recall was issued.  Robert Hilliard of Hilliard Munoz Gonzales is seeking $50,000 for each of the families affected, and names “New GM” as defendant.

The second, filed in federal court as a national class action by Michaels Law Group, cites fraudulent behavior on GM’s part over the ignition switch and subsequent recall. Founding firm member Johnathan Michaels called the automaker’s actions “an unfortunate chapter” in United States history, and proclaimed GM “allowed products to be put in the stream of commerce, knowing that people would die.”

Reuters also reports U.S. Senator Richard Blumenthal of Connecticut, who is a member of the Senate Commerce Committee, penned a letter to Attorney General Eric Holder asking the Department of Justice to demand GM establish a fund “to fully compensate consumers who suffered injury, death or damage” as a result of the ignition switch. He also suggested said fund could be applied while the DOJ conducts their investigation into the recall, one of many being conducted by various federal parties, including the Commerce Committee and the House Energy and Commerce Committee.

Bloomberg says Representative Fred Upton of Michigan, one of 32 House Republicans to back the 2008 bailouts and former co-chair of the Congressional Automotive Congress, will be take part in hearings on April 1 when the committee meets with GM CEO Mary Barra and other executives in a hearing to discuss what happened with the recall. Fourteen years earlier, Upton took on Ford and Firestone over the Explorer’s defective tires, resulting in the Transportation Recall Enhancement, Accountability and Documentation Act of 2000 now affecting both General Motors and the National Highway Traffic Safety Administration.

Regarding the NHTSA, the Detroit Free Press reports Senator Dean Heller of Nevada sent a letter to agency acting head David Friedman asking for answers by the end of the month as to why the NHTSA’s Office of Defects Investigation “declined to forward in both 2007 and 2010 on any vehicle recall recommendation” despite receiving direct access to necessary information from GM. Heller also wants to know what if any threshold complaints need to cross before further investigation is taken.

Back home, GM’s knowledge of the defective component — and its subsequent silence — may also claim Delphi under the wave of red flags the automaker ignored at its peril. Automotive News says the litigation protection established for the supplier during its Chapter 11 bankruptcy process could fall if Delphi was found to have committed fraud by not disclosing their part in the ignition defect during proceedings.

Within the Renaissance Center, USA Today says GM learned in 2007 of a 2005 fatality when a Maryland teen, Amber Marie Rose, lost control of her Cobalt and crashed into a tree while intoxicated. The report noted the airbags had not gone off as intended, with the cause linked to the switch set to “accessory” instead of “on.”

Meanwhile, Automotive News reports the in-house-designed switch — the result of the automaker wanting to do more on its own amid rising warranty costs in the mid-1990s — didn’t meet the specs required of it until its redesign in 2006, nine years after engineers were asked to design the part. However, the improved part retained its old part number when former GM engineers claim it shouldn’t have, while GM remained quiet on the matter until 2013 when a wrongful death lawsuit from Georgia started the ball rolling on the issue.

In the wake of the ongoing maelstrom, GM appointed long-serving engineer Jeff Boyer to the newly created position of vice president of global safety. Boyer will report to Barra on all safety concerns and recall decisions. Automotive News says this is just the first in a series of moves the automaker is taking to show how it has changed since emerging from bankruptcy and government ownership over the past few years, but has a long road ahead in making substantial progress regarding its long-standing bureaucratic culture.

Finally, The Los Angeles Times reports a 2015 GMC Yukon taken for a test drive in Anaheim this weekend suffered from what Anaheim Police Department Lieutenant Tim Schmidt says was “some oil leak or some fluid leaking” during the drive, leading to a catastrophic fire once the driver pulled over upon losing control of the vehicle. Autoblog adds GM will be investigating the matter “very soon,” as per the words of spokesman Alan Adler. No one was hurt in the incident.

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GM Rallies Rentals, Braces For Further Investigation http://www.thetruthaboutcars.com/2014/03/gm-rallies-rentals-braces-for-further-investigation/ http://www.thetruthaboutcars.com/2014/03/gm-rallies-rentals-braces-for-further-investigation/#comments Mon, 24 Mar 2014 12:35:40 +0000 http://www.thetruthaboutcars.com/?p=779185 Saturn-Ion-RedLine

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.

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Saturn Ion Steering Woes Focus Of NHTSA Probe http://www.thetruthaboutcars.com/2014/03/saturn-ion-steering-woes-focus-of-nhtsa-probe/ http://www.thetruthaboutcars.com/2014/03/saturn-ion-steering-woes-focus-of-nhtsa-probe/#comments Fri, 21 Mar 2014 12:45:53 +0000 http://www.thetruthaboutcars.com/?p=776793 2007 Saturn Ion Red Line

One of the handful of models already under recall by General Motors over a defective ignition switch, the Saturn Ion faces additional scrutiny by the National Highway Traffic Safety Administration over failures traced to the vehicle’s electric power steering.

Automotive News reports the NHTSA received 846 complaints from owners of 2004 through 2007 Ions over the steering system, alleging a sudden loss of power steering due to a build-up of brush debris combined with oily material disrupting the system’s motor’s operation. The same issue affected the Chevrolet Cobalt and Pontiac G5, as well — all three shared the same steering system — leading to 16 crashes, two injuries, and a 2010 recall by GM of over 1 million vehicles.

However, the Ion was not included in the 2010 recall, nor did the NHTSA force GM to do so citing lack of sufficient evidence, moves National Legal and Policy Center president Peter Flaherty had trouble understanding as noted in a letter to CEO Mary Barra written this week:

We cannot understand the delay in recalling Saturn Ions, particularly in light of your recent statement that the ignition switch recall “took too long.” You also stated “terrible things happened.” An immediate recall of Saturn Ions will prevent additional “terrible things” from happening.

Though GM offered Ion owners a warranty covering the system for 10 years or 100,000 miles in lieu of a recall, 382,000 Ions would be included in the additional recall.

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Toyoda: Recalls Changed Thinking On Safety, Customer Focus http://www.thetruthaboutcars.com/2014/03/toyoda-recalls-changed-thinking-on-safety-customer-focus/ http://www.thetruthaboutcars.com/2014/03/toyoda-recalls-changed-thinking-on-safety-customer-focus/#comments Fri, 21 Mar 2014 12:15:46 +0000 http://www.thetruthaboutcars.com/?p=776833 Akio Toyoda

One day after Toyota agreed to pay a record $1.2 billion in a settlement with the U.S. Justice Department resolving a criminal probe into the automaker’s handling of a recall involving unintentional acceleration in its vehicles, president Akio Toyoda proclaimed the recalls changed Toyota for the better.

Automotive News reports Toyoda, speaking before the Japan Automobile Manufacturers Association this week, said the recalls “marked a shift in how Toyota and the industry think about safety”:

The criteria for recalls used to be compliance with laws or whether there are technical problems. Now, I think it has become whether the products can assure customers peace of mind.

Regarding recalls overall, Toyoda stated they were good for the “long-term perspective of the automotive industry’s sustainable development,” noting the tool allows for product improvement and finding countermeasures from problems that arise down the line.

Though he remained silent on the settlement, Toyoda said the experience prompted Toyota to alter its approach to quality:

I think it provided a turning point for us to go back to our basic philosophy of “customers come first.” It is getting more and more important to handle recalls by seeing things from our customers’ point of view.

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GM Hires New Safety Czar As Barra, Service Bulletins Go Under The Microscope http://www.thetruthaboutcars.com/2014/03/gm-hires-new-safety-czar-as-barra-service-bulletins-go-under-the-microscope/ http://www.thetruthaboutcars.com/2014/03/gm-hires-new-safety-czar-as-barra-service-bulletins-go-under-the-microscope/#comments Wed, 19 Mar 2014 17:15:11 +0000 http://www.thetruthaboutcars.com/?p=775713 File photo of General Motors logo outside its headquarters at the Renaissance Center in Detroit

General Motors CEO Mary Barra has appointed executive Jeff Boyer to the newly created position of Vice President, Global Vehicle Safety. Meanwhile, Barra and her company’s use of service bulletins in lieu of recalls will both go under the microscope, with the new CEO likely to testify before Congress next month.

Automotive News and Just-Auto report Boyer will provide vehicle safety updates on a frequent and regular schedule to GM’s senior management, board of directors and Barra:

This new role elevates and integrates our safety process under a single leader so we can set a new standard for customer safety with more rigorous accountability. If there are any obstacles in his way, Jeff has the authority to clear them. If he needs any additional resources, he will get them.

Boyer, Barra and a number of GM execs are likely to testify before Congress sometime next month over the decade-delayed recall of 1.76 million vehicles affected globally by a flawed ignition switch that could deactivate engine power and airbags if the key is weighed down by unessential items, with her statements to highlight GM’s focus on the consumer in light of the recall going forward.

Meanwhile, the automaker’s use of service bulletins in lieu of potentially costly recalls — such as the aforementioned ignition recall — may cost GM more than the $35 million in fines the National Highway Traffic Safety Administration could levy on the automaker in terms of reputation, though they may not be alone in sharing the blame.

In 2005 and 2006, two bulletins related to the switch were sent to dealerships with instructions for dealers to ask drivers to remove unessential items from their key rings. Bulletins in general are issued for non-safety issues affecting a vehicle, and are made know only to service shops and the NTHSA, though a 2012 law entitled Moving Ahead for Progress in the 21st Century — requiring the NTHSA to create a searchable public database by 2013 — would have solved the problem had the agency fulfilled the mandate.

According to Center for Auto Safety executive director Clarence Ditlow, bulletins such as the two issued by GM over the switch result in only 10 percent or fewer affected vehicles undergoing necessary repairs, while recalls as administered by the NTHSA through the Motor Vehicle Safety Act pull in 70 percent.

Ditlow also says automakers — looking out for financial incentives — generally seek out other fixes short of an official recall, placing the NTHSA in the position of negotiator when a recall is needed, leading to the situation where the agency itself is under the microscope as Congress probes into why the NTHSA didn’t push hard enough for a recall as early as 2007, when two deaths in Wisconsin related to the switch were brought up before GM executives.

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US Justice Dept, House Panel To Investigate GM Ignition Recall http://www.thetruthaboutcars.com/2014/03/us-justice-dept-house-panel-to-investigate-gm-ignition-recall/ http://www.thetruthaboutcars.com/2014/03/us-justice-dept-house-panel-to-investigate-gm-ignition-recall/#comments Wed, 12 Mar 2014 11:12:40 +0000 http://www.thetruthaboutcars.com/?p=770273 GM-building-US-Flag

Things are going from bad to worse for General Motors amid the fallout related to the long-delayed recall of 1.6 million vehicles worldwide over a faulty ignition switch installed between 2003 and 2007, as both the U.S. Justice Department and a House panel plan to conduct separate investigations into the matter.

Automotive News and Bloomberg report the Justice Department’s investigation will focus on whether or not GM violated criminal or civil laws in failing to alert regulatory bodies sooner than they had about the switch, with lawyers in the U.S. Attorney’s Southern District of New York office leading the charge.

Meanwhile, the House Energy and Commerce Committee will determine if either the automaker or the National Highway Traffic Safety Administration — who is also conducting an investigation into the recall via a 107-question survey due April 3 — missed anything “that could have flagged [the] problems sooner,” according to Representative Fred Upton, who also added:

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.

On top of the aforementioned inquiries, GM itself has hired Jenner & Block LLP chairman Anton Valukas to head an internal investigation into the handling of the recall. Valukas was the appointed examiner for the Justice Department in the inquiry of Lehman Brothers over the financial institution’s downfall in the run-up to the Great Recession in late 2008.

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Uchiyamada: Hybrids Soon Reaching 20 Percent Of Global Sales http://www.thetruthaboutcars.com/2014/03/uchiyamada-hybrids-soon-reaching-20-percent-of-global-sales/ http://www.thetruthaboutcars.com/2014/03/uchiyamada-hybrids-soon-reaching-20-percent-of-global-sales/#comments Tue, 11 Mar 2014 15:00:23 +0000 http://www.thetruthaboutcars.com/?p=769666 2014 Toyota Prius v

The father of the Prius and Toyota chairman Takeshi Uchiyamada foresees hybrid sales climbing from 13 percent of global sales today to 20 percent in the near future.

Automotive News Europe reports that while hybrids make up a good part of sales in the United States and Japan, they are currently a niche market in Europe in the face of equal- or better-performing diesels with lower price tags. However, Uchiyamada believes so strongly in his forecast that he didn’t factor plug-in hybrids in to his forecast, nor give a separate outlook for plug-ins.

Speaking of plug-in hybrids, Uchiyamada believes the key to success lies in higher volumes, especially among suppliers:

Suppliers need higher volumes to slash costs of components specific to plug-in models, including batteries that should be bigger and more capable than the ones used in traditional hybrids.

Regarding the Prius, Uchiyamada said the project — known as Project G21 — was a challenge, beginning with the proposal that the future Prius would net “one and a half times better fuel economy than anything that had existed before,” only to be told by top management to double the proposed number. Then, after a successful debut at the 1995 Tokyo Auto Show, he and his team spent 49 days trying to get the proto-Prius to move, finally doing so near the end of that year, “but only for 500 meters.”

Today, with 25 hybrids between Toyota and its premium brand Lexus, as well as a global total of over 6 million hybrids sold, Uchiyamada may have aged out of the title bestowed unto him regarding the Prius:

Maybe I am the grandfather by now.

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