The Key to GM’s Recall

Automotive recalls have become a political and media sport, practically obscuring the fact they often are prompted by fatalities and injuries.

Back in the day, as everyone seems to be saying these days, during the first recalls after the U.S. government began regulating automotive safety in the 1960s, disinformation was rampant. I recall one major newspaper headline from that era that read “3 Million Defective (name the make) Cars Recalled.”

That’s just plain dumb. Every responsible person should have known only a fraction of those vehicles actually were defective. Then and now, automakers recall the whole lot to find the faulty vehicles and to make sure the problem is fixed.

That’s what General Motors is doing right now: Recalling 2.6 million cars with possibly defective ignition switches, including those traceable to 13 deaths and 31 injuries. The list includes the 2003-2011 Chevrolet HHR and Cobalt; Pontiac G5 and Solstice; and Saturn Ion and Sky. The stickler is GM reportedly has known about the problem since 2006 when a change was made in the switch design, but didn’t issue a recall until February.

No one wants folks to die or be injured, but this is an infinitesimal number of cases considering the number of recalled vehicles out there. I was reminded of that when I stopped behind an HHR and an Ion at a red light. Could more failures occur before GM brings back all of the cars it can find for a fix, which could take another three months while production of new switches ramps up? Not a pretty picture.

So how did GM get in this mess? After all, automakers worldwide have used similar on/off/accessory switches for more than 50 years. It shouldn’t be rocket science. But a check with several engineers reveals other automakers have had to deal with faulty switches, albeit out of the limelight, for a long time.

GM’s response is to urge owners of the suspect cars to remove all but the ignition key from their key rings, because the extra weight of other items can cause the switch to turn off, shutting down the engine, airbag sensors and power brakes and steering.

Only two lower-level GM engineers have been cited for possible malfeasance, and they’ve been suspended with pay. But one recently retired senior GM engineer told me bluntly, “No one would intentionally allow a potential safety issue to slip through. GM has a very strict policy when it comes to ECNs (engineering change notices). There’s a very strict check-off at every level that engineers must meet in developing a solution.”

Another independent automotive engineer says ignition-switch problems are more common than might be expected, because they seldom reach the public-recall level.

“Ignition switches are more complicated than you would think,” he says. “There’s a fine line between designing switches that take too much effort to switch on or too little,” he says. “It could be they were looking at it from the customer’s viewpoint, trying to make it easier to turn the switch.”

Who’s to blame and at what level? All of this will play out in the weeks and months ahead in what is becoming a complicated and, for GM, costly issue. It has set aside $1.3 billion to cover recall liabilities, which may not be enough as federal and state regulatory agencies, the U.S. Department of Justice and hordes of lawyers weigh in.

A hostile Congress already has set the stage, hammering new GM CEO Mary Barra like a felon in Washington hearings. With Congress polling a sickly 12% approval rating, it’s a good bet GM has a vastly higher rating, despite its current troubles. Watching Barra testify was like viewing a court scene loaded with prosecutors, a lone defense witness and no jury.

For her part, Barra, who took office in January, says she had first heard about the switch problem in December but not during her term in the top product-development post that began in February 2011. She says GM will face up to the issue and has made several personnel moves and other actions, including making loaners available, to assure the automaker will make good in resolving the problem and prevent a recurrence.

Wrangling already is under way over whether GM is liable for switch failures prior to its July 2009 bankruptcy that separated the “Old GM” from the “New GM.” Most experts say it’s not responsible pre-bankruptcy, but GM nonetheless is looking at compensating those harmed prior to 2009.

Who knew what and when? “It’s highly unlikely that upper management knew about the switch problem,” says the retired GM engineer, “because it is something that typically is routinely handled at lower levels.”

Still, if the top brass has been negligent, Barra could be joined in the searing spotlight by some heavyweights who have since departed GM and by high-ranking executives still there.

No one has yet pointed the finger at members of either group, but the list starts with Rick Wagoner, who was GM’s CEO when the faulty switch issue first surfaced in 2006. Wagoner headed GM from June 2000 to April 2009, when he was ousted by the Obama Admin. as part of the government bailout that preceded GM’s bankruptcy.

Wagoner was replaced by Fritz Henderson, who reigned briefly from April to December 2009. Then came former ATT CEO Ed Whitacre, who spent nine months at the top before retiring in September 2010.

He was followed by Dan Akerson, former managing director of the Carlyle Group, a private-equity firm, who joined GM’s board in July 2009 representing the U.S. Treasury. Akerson stayed on until Jan.15 when Barra took over.

Then there’s the consummate “car guy,” Bob Lutz, whom Wagoner hired in 2001 as vice chairman to revamp GM’s stodgy lineup and reorganize its global product development group. All of the cars being recalled came under Lutz’s leadership, but so did the numerous winners he’s credited with bringing to market.

Lutz stayed on until May 2011, after which he was retained for a time as an adviser to GM.

Putting things into perspective, many other automakers have been put through the recall wringer and suffered costly monetary and public-relations setbacks over widely publicized safety issues, including Toyota, Ford and Audi.

To borrow an advertising phrase from Lexus, “The Pursuit of Perfection” goes on.