GM Rallies Rentals, Braces For Further Investigation

Cameron Aubernon
by Cameron Aubernon
gm rallies rentals braces for further investigation

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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  • CJinSD CJinSD on Mar 24, 2014

    Can old GM be scapegoated for the 2015 Chevrolet Tahoe that incinerated itself today on a test drive in Anaheim? Who was it that was trying to reason with a spouse that wanted a new Tahoe? I think he just received his Get Out of Jail Free card.

    • See 2 previous
    • APaGttH APaGttH on Mar 24, 2014

      @28-Cars-Later My edition was written after the fist Tesla fire. It might have changed after the third. There was also the Chevy SS pace car that burned which might not be in my version. I believe the excuse for that one was, "it wasn't factory equipment." Oh, and I can go to page 17 of the rule book - always be pedantic. It was a 2015 GMC Yukon that burned, not a Tahoe - get it right. ;-)

  • NormSV650 NormSV650 on Mar 24, 2014

    I' still waiting for TTAc to do a full expose on the ignition key torque of recalled and post recalled cars of the same model like they did with the zcztzs pedal disecting the innards of the accelerator pedal....not going to happen as all cars can turn off easily like the GF's Forester-just tug on the pepper spray and the engine turned off.

    • Phillip Thomas Phillip Thomas on Mar 25, 2014

      Nearly did it before it became less of an issue of finding fault with the ignition cylinders. During the initial reporting, naysayers mostly pointed at the consumers. With GM owning right up to the problem, it didn't seem necessary. The test would was going to be conducted with a gun trigger pull scale. That said, with my roommate having an '05 Cobalt, it's scary-easy to bounce 'off'. And no other car in our fleet can be turned off by bouncing the keychain against the key.

  • Redapple2 I m OK with State Inspections, OF 7 , 8 OR HOWEVER OLD CARS. I get a new car every 3-5 years. Well, that aint right. When I lived in NY, it would really fry my butt to be compelled to have my new car inspected. Add in 9% sales tax ( after i ve already paid ~50% on the money when I made it - so- i had to make $2 to have $1 in my pocket- So, net it back upward? > it s a 18% tax.) Add in massive property tax, state income tax. Brutal winters. I voted with my feet. Off topic a little. Sorry.
  • Adamscotthi Thanks a lot for article!
  • MaintenanceCosts This class of car competes hard with Chargers/Challengers and modded diesel pickups for the douchey-driving crown.
  • 28-Cars-Later Corey - I think I am going to issue a fatwa demanding a cool kids car meetup in July somewhere in the Ohio region.
  • Master Baiter Might as well light 50 $100 bills on fire.