The Truth About Cars » general motors http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 16 Apr 2014 05:18:32 +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 » general motors http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com 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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Ontario Government Selling GM Shares To Fund Public Transit http://www.thetruthaboutcars.com/2014/04/ontario-government-selling-gm-shares-to-fund-public-transit/ http://www.thetruthaboutcars.com/2014/04/ontario-government-selling-gm-shares-to-fund-public-transit/#comments Mon, 14 Apr 2014 13:00:34 +0000 http://www.thetruthaboutcars.com/?p=794802 r-GM-CANADA-RD-INVESTMENT-large570

The government of Ontario has announced  it will sell its shares in General Motors as part of an effort to fund new public transit programs in the Greater Toronto Area. But the move could end up hastening the demise of GM’s Oshawa plant, located in the same metropolitan area.

According to The Globe and Mail, the sale could net about $1.4 billion for the province, which would “wait over the next year for the best time to sell.” While divesting its stake isn’t necessarily a bad thing, the timing of the sale coincides with two events that have a major impact on Oshawa’s future.

The first is the expiration of GM’s Vitality Commitment, a document signed during the bailout as part of the terms for receiving government funds., which requires GM to keep 16 percent of production in Canada until GM’s loan to the Canadian and Ontario government is re-paid, or until December 31, 2016, whichever comes first.

With the loans repaid, and GM’s shares now being sold off, the biggest question mark for Oshawa will be the expiration of GM’s contract with Unifor (formerly the CAW), which will expire in 2016, along with Unifor’s Ford and Chrysler contracts.

Oshawa has slowly seen its product whittled away, most recently losing the Chevrolet Camaro to Lansing, Michigan where the Cadillac ATS is built. As of now, the Flex Line (one of two assembly lines) has no unique product, with the Cadillac XTS and Chevrolet Impala also built in Michigan, the Buick Regal is also built in Germany and the Chevrolet Equinox/GMC Terrain are made in multiple locations.

The Consolidated Line, which builds the old W-Body Impala for fleets, is due to be shut down in 2016. The big question is whether the Flex Line will follow. The 2016 date may provide an easy out for GM, since it can use the labor contract expiry to close down Oshawa.

The plant’s closing would be a devastating blow to Oshawa, which is just as much of a “GM Town” as Flint, Michigan was in the “Roger & Me” era. Of the Detroit Three plants currently operating in Ontario, Oshawa has been in jeopardy the longest – but at this point, it’s an inevitability.

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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 Invests $449M Into Next-Gen Volt Production http://www.thetruthaboutcars.com/2014/04/gm-invests-449m-into-next-gen-volt-production/ http://www.thetruthaboutcars.com/2014/04/gm-invests-449m-into-next-gen-volt-production/#comments Wed, 09 Apr 2014 14:10:01 +0000 http://www.thetruthaboutcars.com/?p=791273 2013 Chevrolet Volt Exterior-001

General Motors announced Tuesday that it would invest $449 million into the two plants responsible for assembling the Chevrolet Volt in preparation for the next generation of the plug-in hybrid’s arrival in 2016.

The Detroit News reports $384 million will immediately go into the Detroit-Hamtramck assembly plant for body shop tooling, equipment and other plant upgrades, while the remaining $65 million heads for the Brownstown Township battery assembly plant for expanded production of GM’s advanced lithium-ion batteries, as well as any future technologies that come down the road. The investments are expected to last for the next two years, and would add 1,400 new jobs to both facilities.

As for what fruit the investment will bear, GM vice president of North American manufacturing Gerald Johnson announced the next generation of the Volt will roll into showrooms in 2016 as a 2016 model, with production slated to begin in the autumn of 2015. Though he didn’t go further into what the new Volt would bring to the table, a number of analysts said the PHEV would likely gain an improvement in range over the 38 miles currently provided in electric-only travel.

Further, two new vehicles will accompany the new Volt within the next couple of years, including the Buick LaCrosse — expected in mid-2016 — and an all-new large Cadillac sedan set to be the brand’s flagship that would begin production around the same time as the next-gen PHEV.

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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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Report: Ontario Government To Sell GM Shares To Fund Public Transit http://www.thetruthaboutcars.com/2014/04/report-ontario-government-to-sell-gm-shares-to-fund-public-transit/ http://www.thetruthaboutcars.com/2014/04/report-ontario-government-to-sell-gm-shares-to-fund-public-transit/#comments Thu, 03 Apr 2014 00:08:42 +0000 http://www.thetruthaboutcars.com/?p=786513 oshawaGM

The Globe and Mail is reporting that the Ontario government may dump its shares of General Motors as a way of helping to fund expanded public transit in the Greater Toronto Area.

According to the newspaper, the sale of GM shares will be part of a broader asset sale. With tax increases (namely an increased sales tax and a new levy on gasoline sales) being ruled out, the asset sale will likely be used to make up the shortfall in funding for badly needed public transit for Toronto and its surrounding regions.

At current market value, the shares are valued at $1.4 billion CAD.

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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 Recalls 1.3 Million Additional Vehicles As Barra Heads To D.C. http://www.thetruthaboutcars.com/2014/04/gm-recalls-1-3-million-additional-vehicles-as-barra-heads-to-d-c/ http://www.thetruthaboutcars.com/2014/04/gm-recalls-1-3-million-additional-vehicles-as-barra-heads-to-d-c/#comments Tue, 01 Apr 2014 10:07:19 +0000 http://www.thetruthaboutcars.com/?p=785569 GM

The Detroit News reports General Motors CEO Mary Barra boarded a commercial flight from Detroit to Washington, D.C. Sunday in order to prepare for two separate hearings before Congress regarding her company’s handling of the ongoing 2014 recall crisis. While in the nation’s capital, she also met with 25 family members whose relatives were killed in crashes linked to the ignition switch behind the recall.

CNN Money adds GM is about to reveal the names of the 13 people who lost their lives due to catastrophic failure linked to the defective part. The information will be made available to the public, with sensitive information — corporate secrets and personal data — redacted prior to publication. The information is part of a request by the National Highway Traffic Safety Administration due April 3.

As for what Barra and NHTSA acting administrator David Friedman plan to say before the House and Senate hearings, Automotive News reports Friedman is standing firm on his agency’s effort to “properly carry out its safety mission based on the data available to it and the process it followed” in prepared remarks to the House Energy and Commerce Committee, while Barra reiterates her position on the events leading up to the recall and subsequent actions moving forward:

When we have answers, we will be fully transparent with you, with our regulators and with our customers.

Automotive News also put forth four key issues Barra and Friedman will have to explain before Congress and the general public:

  • How GM’s multiple internal investigations failed to lead to a recall sooner
  • Why NHTSA failed to launch an investigation, despite signs that a faulty switch might be causing airbags not to deploy
  • Whether and how GM’s vehicle-safety protocols have changed
  • Whether GM’s internal processes were violated or laws were broken

Tying into the fourth issue, House Democrats have found and named the engineer behind the 2006 ignition redesign as Ray DeGiorgio, who denied in a 2013 court deposition having knowledge that the part was changed. They also penned a letter to Barra stating the redesigned switch still didn’t meet spec, based on information provided by supplier Delphi confirming the switches meant for 2008 – 2011 models tested poorly alongside the switch approved in 2002 now linked to 13 fatalities and 33 crashes.

Automotive News also posits the reason behind the NHTSA not pushing forward on a recall sooner was due to a heavy focus on child deaths linked to airbags. When GM introduced a smart airbag system in their vehicles in the 2000s, the agency focused on whether or not the airbags were doing their job to protect children placed in the front seat, with the goal of assessing “real world” performance while spotting “unusual circumstances” — such as the flawed ignition switch behind the recall — that would allow for “early identification of potential problems,” according to a 2004 statement by former agency boss Chip Chidester.

In new recall news, GM recalled 1.3 million vehicles made between 2004 and 2010 whose power steering could suddenly lose electric power, with the automaker aware of “some crashes and injuries” tied to the steering. Vehicles affected include: Chevrolet Malibu, Malibu Maxx, non-turbo HHR and Cobalt; Saturn Aura and Ion; and Pontiac G6.

As for reporting issues that could lead to a recall, GM leads the way in filing early-warning reports to the NHTSA with 6,493 reports between 2005 and 2007; Chrysler and Toyota filed around 1,300 in the same period, while Honda filed 290. However, the cause behind the numbers is in how each automaker follows the 2000 TREAD Act, with GM setting an extremely low threshold for reporting in comparison to other automakers.

Finally, a number of lawsuits are being aimed directly at dismantling the liability protection GM’s 2009 bankruptcy provided to “New GM.” The tactics range from securities fraud and loss of resale value, to wrongful death.

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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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Opel Will Build Buicks For North America http://www.thetruthaboutcars.com/2014/03/opel-will-build-buicks-for-north-america/ http://www.thetruthaboutcars.com/2014/03/opel-will-build-buicks-for-north-america/#comments Fri, 28 Mar 2014 13:38:55 +0000 http://www.thetruthaboutcars.com/?p=782977 450x299xOpel_Cascada_Innovation_2.0_BiTurbo_CDTI2-450x299.jpg.pagespeed.ic.PKOtAH6g90

Opel is announcing that they will build a Buick model for North America in the “second half of the decade”.

Automotive News reports that the announcement comes amid a $245 million euro investment for the Ruesselsheim, Germany plant that will start exporting to North America, and receive a new model. At the same time, Opel will stop plans to export to China, allowing the much stronger Buick brand to take the lead.

Neither the Opel Adam nor the Cascada are built at Ruesselsheim, which raises the question of what model Opel will build for Buick. Currently, the Insignia, aka our Buick Regal, is built at the site.

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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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GM Hits Social Media, As Part Number Debacle Adds Confusion http://www.thetruthaboutcars.com/2014/03/gm-hits-social-media-as-part-number-debacle-adds-confusion/ http://www.thetruthaboutcars.com/2014/03/gm-hits-social-media-as-part-number-debacle-adds-confusion/#comments Thu, 27 Mar 2014 13:32:08 +0000 http://www.thetruthaboutcars.com/?p=781977 2007 Chevrolet HHR 2LT Special Edition

The latest development in the GM ignition recall fiasc

Automotive News reports Barra recorded and released five short videos for GM’s YouTube channel in an ongoing attempt to minimize the damage to her company’s reputation in the court of public opinion. The overall message of the videos is that the public is the automaker’s compass, and GM will develop “a world class process” of vehicle safety evaluation so that nothing resembling the current crisis occurs in the future.

However, Bloomberg says this trial by fire is only the beginning for Barra’s tenure as GM’s CEO. Slow sales in the United States due to harsh winter weather at the start of the year, mitigating losses in Europe, restructuring of global operations in Australia and South Korea, and currency challenges in Russia and South America all have made their impact on GM’s stock value, falling 14 percent since Barra took the reins in mid-January 2014. She also must contend with Volkswagen — who knocked GM down to third in the Big Global Three trio last year — by maintaining or increasing pace in China against the Germans by as much as 10 percent.

Over in Washington, D.C., safety advocates have found the NHTSA lacks the resources needed to properly investigate provided data that could lead to a prompt recall, just as Congress has done all they could to strengthen the agency via the 2000 TREAD Act established in the wake of the 2000 Firestone-Ford recall case.

Currently, the NHTSA’s Office of Defect Investigations saw their numbers fall from 62 to 51 investigators over the years, and operates on an annual budget of $10 million since 2005. Meanwhile, the number of registered vehicles increased to 248 million in the same time, a number proving difficult to monitor — resulting in the recall crises experienced by Toyota and GM — as Advocates for Highway and Auto Safety president Jackie Gillan explains:

The idea of $10 million for an office that’s in charge of the safety of all these vehicles, undertaking investigations and doing the recalls, it’s just ridiculous. You look at the number of people working on this, you look at their inadequate funding, and you think to yourself, no wonder this is happening over and over again.

For their part, NHTSA spokesman Nathan Taylor defended his agency’s record, citing 929 recalls involving over 55 million vehicles in the last seven years as a result of their investigations. In addition, he says automakers paid a total of over $85 million in fines over delays, and notes fatalities related to defects are at an historic low. However, Taylor believes the process could be improved:

[The agency] pursues investigations and recalls wherever our data justifies doing so. NHTSA is constantly looking for ways to improve our process so we can better identify serious safety defects.

On the lawsuit front, Charles and Grace Silvas of Texas have asked U.S. District Judge Nelva Gonzales Ramos to force GM to issue a “park it now” warning to all affected owners not to drive their vehicles until the ignition switch is fixed. The possible class action suit — which could net up to $10 billion in damages — was filed not due to any fatalities experienced by the Silvas, but because the defect’s concealment led to lost resale value.

USA Today reports that Barclays analyst Brian Johnson is predicting that GM will create a settlement fund between $1 billion and $1.5 billion for affected customers, on top of banking $1 billion to pay the potentially sizable fine issued by the U.S. federal government when all is said and done. Johnson says the funds could be funneled through “Old GM,” which would maintain the wall protecting “New GM” from pre-bankruptcy liabilities.

Reuters and USA Today both warn of potential headaches dealerships and repair shops will likely experience as the recall crisis continues to unfold.

One major headache for dealers and independent parts stores will be sifting through the spare parts room to find which ignition is the improved part, and which one is the defective unit. The problem comes from both sharing the same part numbers — GM 10392423 and Delphi D14611 — a move that is considered to be counter to standard operating procedure when fixing a defective part.

For repair shops, this means the only way to tell which part is which — outside of possessing forensic engineering tools — is by disassembling every single ignition related to the recall.

The second issue: Finding enough loaner vehicles for every affected customer. Thus far, GM received 9,000 requests for such vehicles, but despite calling upon rental companies such as Enterprise and Hertz for backup, dealers are having a hard time placing customers in loaners, including Kolar Chevrolet general manager Dwayne Haapanen:

There’s been a bit of a struggle finding the cars. I burned up all my loaner fleet, and we’ve been renting from Enterprise — and now they are out of cars.

Consumers are also having a hard time obtaining a loaner, though quantity isn’t the only issue. GM’s hotline for recall questions and loaner requests has seen long waits for callers, as well as a lack of thorough training for those manning the phones, sometimes leading to request denials. The automaker is adding staffing and improving training to alleviate the problems.

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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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Subprime Lending Still On The Rise As GM Financial Grows Prime Lending Operations http://www.thetruthaboutcars.com/2014/03/moodys-subprime-on-the-rise/ http://www.thetruthaboutcars.com/2014/03/moodys-subprime-on-the-rise/#comments Tue, 25 Mar 2014 20:05:02 +0000 http://www.thetruthaboutcars.com/?p=780737 450x236xGM-Establishes-GM-Financial-1024x539-450x236.jpg.pagespeed.ic.I-LWSrSJhA

Subprime auto financing continues to grow, and while one analyst at Moody’s says that banks are largely staying out of the subprime space, overall lending continued to rise, with retail banks seeing some of the strongest growth. This expansion in lending, particularly subprime, was attributed as a key driver in auto sales. SNL cited forecasts for a SAAR of between 16 and 16.7 million in 2014, up from 15.5 million in 2013.

SNL Financial, a finance industry trade publication, directly attributed strong auto sales to the increase in subprime financing, drawing a connection between the increased SAAR and an increase the portfolios of subprime lenders. Consumer Portfolio Services Inc saw a 37 percent growth in receivables year-over-year, with over $1.2 billion in receivables for Q4 2014.

The increase in subprime lending along with looser underwriting standards has led ratings agencies to view the sector in a negative light. Fitch, which has issued a negative outlook in the sector as a whole, told SNL that overall, losses were at “historical lows” and that the increase in lenders will make the segment more competitive.

SNL also reports that Moody’s has cast an eye on underwriting standards, with Moody’s VP Mark Wasden stating that longer loan terms (due to higher prices, more durable cars and increased ownership periods) is a major factor.

While Wasden noted that banks were remaining “relatively conservative” regarding subprime lending, savings banks saw the biggest growth in overall lending among depository institutions, growing 16.06 percent year over year (compared to 11.24 percent for credit unions and 10.04 percent for commercial banks). Even so, commercial banks remained the dominant force, issuing $331.92 billion in loans, with savings banks accounting for just $21.49 billion.

Another notable development is the increasing reliance of GM Financial on General Motors – while this sounds redundant, General Motors vehicle financing now accounts from 70 percent of GM Financial’s business, and receivables have more than doubled to $33 billion in Q4 2013 from just $13 billion a few years ago. GM Financial, once known as AmeriCredit Corp, was largely a subprime focused business when GM bought it in 2010, but plans are underway to transition GM Financial to prime lending. While GM Financial is now stepping into the role that the legendary GMAC once occupied, Ally (GMAC’s successor), is shrinking from the auto lending market, suggesting a reversal of roles for GM’s two finance arms .

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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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QOTD: Chevrolet Colorado To Render Other Trucks “Obsolete” http://www.thetruthaboutcars.com/2014/03/qotd-chevrolet-colorado-to-render-other-trucks-obsolete/ http://www.thetruthaboutcars.com/2014/03/qotd-chevrolet-colorado-to-render-other-trucks-obsolete/#comments Mon, 24 Mar 2014 15:27:45 +0000 http://www.thetruthaboutcars.com/?p=779449 2015-Chevy-Colorado-3

Today’s quote of the day comes from GM’s Jim Cain (not to be confused with our own Tim Cain), who is quoted by Automotive News as making some rather bold predictions for the upcoming Chevrolet Colorado mid-size truck.

Speaking to AN about possible cannibalization on the part of the Colorado, Cain said

“We’re not worried about the Chevrolet Colorado attracting would-be Silverado customers…The people who should be worried are the ones who orphaned their mid-size truck customers, and those who sell trucks that are about to be rendered obsolete.”

I’m not sure which trucks will be “rendered obsolete”. The Tacoma? The Frontier? The V6 F-150? The GM full-sizers that have to be redesigned in 2018 due to what many observers agree is a botched launch?

As someone who prefers smaller vehicles and lives in region with high gas prices, the emotional appeal of a mid-sizer is there. But the business case is weak. Market share for smaller trucks is just 225,000 units, in a truck market worth 1.6 million units overall and a total car market with a SAAR of around 16 million. And the majority of that one segment belongs to just one truck, the Toyota Tacoma.

The main selling points of a smaller truck, namely price and fuel economy, have been eroded by increasing full-size fuel economy and lower prices. Anyone who has seen the new GM mid-sizers knows that they aren’t all that mid-size: they have a footprint similar to a GMT900 pickup, as opposed to a Ranger. And too few Americans have the sort of space constraints – the kind that necessitate these trucks in world markets – that would make a mid-size truck successful.

Corporate communication strategy dictates that the sort of tough talk that Cain is relaying is essential to their messaging, especially in such uncharted territory. But it’s difficult to take take in these claims with a straight face, especially when every other factor indicates a different outlook. Of course, I could be wrong. Maybe the Colorado is a game changer.

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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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Tesla Reader’s Digest Vol. 1: The Politics Of Dancing http://www.thetruthaboutcars.com/2014/03/tesla-readers-digest-vol-1-the-politics-of-dancing/ http://www.thetruthaboutcars.com/2014/03/tesla-readers-digest-vol-1-the-politics-of-dancing/#comments Mon, 24 Mar 2014 12:19:42 +0000 http://www.thetruthaboutcars.com/?p=779249 Tesla Roadster and Model S

In the first edition of the Tesla Reader’s Digest, Washington state makes nice with Tesla’s business model as Arizona ponders doing the same — while fighting three other states for the right to host Tesla’s Gigafactory, no less. Meanwhile, General Motors pens a letter to Ohio asking the state to force the EV automaker to play by the same rules as they already do, pricing of the Model S falls in Europe, and Edward Niedemeyer offers his view on how Tesla can topple the auto dealer monopoly.

The Detroit News ran our former EIC (originally published at Bloomberg View) a few inches to explain the situation Tesla faces with its revolutionary-for-the-United States model of doing business from the rent-seeking opposition found in the entrenched dealer franchise system. Though the automaker has already been locked out of Texas and New Jersey due to such opposition thus far, Niedermeyer offers that CEO Elon Musk has a few potential allies — including Fiat Chrysler Automobiles, eBay, Costco and TrueCar — who could help him and the U.S auto industry as a whole bring about a future where all automakers can sell directly to customers.

Reuters and CNN Money report the states of Washington and Arizona are or soon will be signing legislation allowing Tesla to market directly to consumers; previously, the automaker’s sole Washington direct-sales efforts were in Seattle, whereas Arizona only allowed showrooms, pushing sales across the border to California.

The Washington legislation came as a result of campaigning from that state’s Tesla-owning constituents with help from a lobbyist, which will allow the automaker to expand into more cities while forcing every other automaker — upcoming or long-established — to sell through franchise dealerships, a situation advocates claim will need to be remedied when legislatures return to Olympia next January.

Arizona, however, is coming around to help improve the state’s chances in becoming the home of Musk’s grand energy project, the Tesla Gigafactory. Autoblog Green also reports Tucson has not only a suitable site for the 1,000-acre, 10 million-square-foot battery factory, but the tax incentives to lure 6,500 jobs away from Nevada, Texas and New Mexico.

As for the other three states, New Mexico is working on an economic package, while Nevada remains silent on their moves, and Texas has incentives galore in spite of banning direct-sales, the latter of which could hurt the state’s chances.

Speaking of direct-sale bans, Automotive News reports General Motors penned a letter to Ohio governor John Kasich over concerns his state could open the door to Tesla. GM’s senior vice president of global communications and public policy Selim Bingol explains his employer’s viewpoint:

We understand discussions are ongoing over legislation which could provide a broad exemption for a single manufacturer, Tesla Motors Inc., to circumvent long-established legal precedent on how new motor vehicles are marketed, sold and serviced in your state.

GM is not alone, as lobbyists representing the Ohio Automobile Dealers Association warned the state legislature last week that by allowing Tesla to sell directly to consumers, it would allow all automakers to do the same, casting the franchise model to the wind.

Finally, Tesla may be fighting a different battle in Europe. Inside EVs reports pricing of the Model S has dropped in Germany and Netherlands 6,700 euro and 4,000 euro respectively to 65,300 euro and 66,200 euro. Though Tesla cites currency appreciation against the dollar, low demand and lack of a sufficient Supercharger network may be to blame.

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Diesels, Refinement Key To Kiefer’s Vision Of Future GM Engine Development http://www.thetruthaboutcars.com/2014/03/diesels-refinement-key-to-kiefers-vision-of-future-gm-engine-development/ http://www.thetruthaboutcars.com/2014/03/diesels-refinement-key-to-kiefers-vision-of-future-gm-engine-development/#comments Fri, 21 Mar 2014 12:30:54 +0000 http://www.thetruthaboutcars.com/?p=776809 Steve Kiefer

General Motors head of global powertrain and former Delphi senior vice president of powertrain systems Steve Kiefer aims to steer engine development toward a brighter future, one influenced by his love for diesels, quietness and refinement.

Automotive News reports Kiefer’s vision may have begun to come to fruition this week with the debut of the new Ecotec family of engines slated to power 25 percent of GM’s global lineup by 2017. The eleven engines are based on older-though-proven technology found in the cam chains, blocks and other components, resulting in a family with lower NVH than previous engines. The new Ecotec family is a reflection of Kiefer’s method of improving existing technology to accomplish what competing engines already do — such as Ford’s EcoBoost — for little cost in development and assembly.

Speaking of Ford, both the Blue Oval and the General are collaborating on a new generation of nine- and 10-speed transmissions for their respective pickups, with the latter expected to arrive in two years. Though no word has been said on whether GM will either use diesel power or smaller gasoline engines in their fullsize trucks, Kiefer’s experience on the supply side of the industry — especially in regards to knowing what the competition is doing to be green and efficient — could prove valuable in the long run.

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