General Motors

Fix for faulty GM ignition switch linked to 13 deaths cost just 57 cents

Congress demands answers from General Motors' new chief executive as to why it took carmaker 10 years to recall defective vehicles

PUBLISHED : Wednesday, 02 April, 2014, 8:41pm
UPDATED : Thursday, 03 April, 2014, 6:42pm

The fix for a faulty ignition switch linked to 13 traffic deaths would have cost just 57 US cents, members of Congress said as they demanded answers from General Motors' new chief executive on why the carmaker took 10 years to recall cars with the defect.

At a hearing before a House subcommittee, GM's Mary Barra acknowledged under often testy questioning on Tuesday that the company took too long to act. She promised changes at GM that would prevent such a lapse from happening again.

"If there's a safety issue, we're going to make the right change and accept that," said Barra, who became chief executive in January and almost immediately found herself thrust into one of the biggest product safety crises Detroit has ever seen.

But as relatives of the crash victims looked, she admitted that she did not know why it took years for the dangerous defect to be announced. And she deflected many questions about what went wrong, saying an internal investigation was under way.

Since February, GM has recalled 2.6 million cars — mostly Chevrolet Cobalts and Saturn Ions — over the faulty switch, which can cause the engine to cut off in traffic, disabling the power steering, power brakes and airbags and making it difficult to control the vehicle. The carmaker said new switches should be available from April 7.

Barra was firm, calm and polite throughout the proceedings. But she struggled at times to answer lawmakers' pointed questions, particularly about why the carmaker used the switch when it knew the part did not meet its own specifications.

When she tried to draw a distinction between parts that did not meet specifications and those that were defective and dangerous, congressman Joe Barton shot back: "What you just answered is gobbledygook."

She also announced that GM has hired Kenneth Feinberg — who handled the fund for the victims of September 11, the Boston Marathon bombing and the BP oil spill — to explore ways to compensate victims of accidents in the GM cars. Barra stopped short of saying GM would establish such a fund.

Some of the questioners appeared surprised that Barra had not reviewed the tens of thousands of pages of documents that GM had submitted to the committee, and that she was unaware of some decision-making processes at the company.

Congresswoman Diana DeGette, held up a switch for one of the cars and said a small spring inside it failed to provide enough force, causing engines to turn off when they went over a bump.

DeGette showed how easy it was for a light set of car keys to move the ignition out of the "run" position.

GM has said that in 2005 company engineers proposed solutions to the switch problem, but the carmaker concluded that none represented "an acceptable business case."

"Documents provided by GM show that this unacceptable cost increase was only 57 cents," DeGette said.

The 57 cents is just the cost of the replacement switch. The figure does not include the labour costs involved in installing the new part.

Under questioning, Barra said GM's decision not to make the fix because of cost considerations was "disturbing" and unacceptable, and she assured members of Congress that that kind of thinking represents the old General Motors, and "that is not how GM does business" today.

"I think we in the past had more of a cost culture," Barra said, adding that it is moving toward a more customer-focused culture.

She testified that the inexpensive fix to the switch, if undertaken in 2007, would have cost the carmaker about US$100 million, compared with "substantially" more now.

Congressmann Tim Murphy, the Republican chairman of the House Energy and Commerce Subcommittee on Oversight and Investigations, read from an e-mail exchange between GM employees and those at Delphi, which made the switch. One said that the Cobalt was "blowing up in their face in regards to the car turning off."

Murphy asked why, if the problem was so big, GM did not replace all of them in cars already on the road. "Clearly there were a lot of things happening" at that time, Barra said.