General Motors Digest: June 30, 2014

In today’s General Motors digest: GM recalls over 700,000 units globally; Siemens VDO Automotive urged the automaker to look into airbag data in 2004; product chief Doug Parks was aware of the ignition problems in 2005; Feinberg compensation plan will have no payment cap; and Delphi is under the gun from both Congress and the IRS.

Autoblog and The Detroit News report the following vehicles are under recall:

• 2013 – 2014 Chevrolet Cruze: Takata airbag inflator defect; 29,019 (U.S.), 4,066 (Canada)
• 2014 – 2015 Chevrolet Silverado/GMC Sierra; 2015 Chevrolet Tahoe, Surburban/GMC Yukon, Yukon XL: Transfer case electronically switching to neutral without driver input; 392,459 (U.S.), 53,607 (Canada), 20,874 (Other Markets)
• 2013 – 2014 Chevrolet Caprice, SS: Potential for windshield wiper motor gear teeth to become stripped; 4,794 (U.S.)
• 2014 Chevrolet Corvette: Insufficient welding in rear shocks of FE1, FE3 suspension-equipped vehicles; 1,939 (U.S.), 33 (Canada), 82 (Other Markets)
• 2009 – 2012 Buick Excelle GT: Potential for high-beams to remain on under extreme circumstances; 194,107 (China)

Automotive News says in 2004, Siemens VDO Automotive engineer Douglas McConnell wrote a report urging GM to look into a possible link between airbag sensors and the loss of power via the ignition cycle. The GM-commissioned report was penned a month before the first Chevrolet Cobalts left the assembly line, and shown to five engineers working for the automaker at the time, including Matthew Craig, who currently works for the National Highway Traffic Safety Administration as its chief of human injury research. Declining to elaborate on the report, representative Greg Martin stated “there were several missed opportunities for GM to properly identify the problem,” citing the Valukas report to back his statement.

Meanwhile, Bloomberg reports that Doug Parks, appointed to the post of vice president of global product programs by CEO Mary Barra, was a vehicle chief engineer for the Chevrolet Cobalt program in 2005. In that role, he was a part of the cost debate over whether or not to redesign the ignition switch that would be put into the compact, stating in a May 2005 email that changing the design “appears to be the only real, quick solution.” Parks had been invited to attend two meetings in the first half of 2005 over the issue, though nothing could be determined as far as attendance was concerned.

In the present, Kenneth Feinberg’s compensation program for those injured or killed as a result of the ignition switch will pay claims to all drivers, passengers and bystanders involved in an accident with an affected GM vehicle. Further, claimants will have few hurdles to go through in being paid, including alcohol use and lack of physical evidence. Finally, the program will have no cap on the amount of money paid in total, though no word has been given by Feinberg and his time about how much will be paid per victim and their families. Claims will be accepted beginning August 1.

Finally, Automotive News reports Delphi, already under investigation by the U.S. House Energy and Commerce Committee over its part of the February 2014 ignition switch recall, is now under the gun from the Internal Revenue Service over whether or not the supplier can be taxed as a domestic corporation. Upon emerging from bankruptcy in 2009, Delphi set up its tax base in the United Kingdom, though it retained its headquarters and executive team in Troy, Mich. Should the supplier lose its appeal with the IRS, its tax rate could rise to 22 percent effective rate, up from the 17 percent Delphi pays currently. In 2013, it paid $256 million in taxes; under the new rate, an additional $75 million would need to be paid, bringing the total to approximately $331.3 million.