Defective ignition switches are creating a crisis for General Motors

Mar 18, 2014

Last month, General Motors recalled 1.6 million vehicles because of faulty ignition switches linked to 13 deaths and at least 31 crashes.

That has grown into that biggest crisis GM has faced in years, and an early and severe test for its new chief, Mary Barra.

Yesterday she released a video making a public apology:

“Something went wrong with our process in this instance and terrible things happened. As a member of the GM family and as a mom with a family of my own, this really hits home for me. And we have apologized. But that is just one step in the journey to resolve this.”

Also yesterday, the automaker announced another recall: more than 1.7 million vehicles in three new campaigns.

“There is some indication that GM knew about this as long ago as 2001,” said Sonari Glinton, who covers the auto industry for NPR. “There are a lot of recalls in the auto industry; Honda had a 900,000 car recall. It’s about how you handle it after it happens. This is a little different because there are indications that GM knew about it, so that puts it in a different level.”

Barra ordered an outside "unvarnished" investigation into why it took more than a decade for the company to alert consumers and regulators to the defect. The investigation will be led by Anton Valukas of the firm Jenner & Block. There will be other investigations by the U.S. House and Senate.

“It’s really the cover-up that always will get you, because consumers know that there’s going to be recalls on cars, they happen every week, but they want to know that you’re dealing with them in an expeditious manner,” said Glinton.

“As soon as you find out about a defect in the car, you have five days according to the law to let the government know and to begin the process of a recall,” said Jack Nerad, who's vice president, executive editorial director and executive market analyst with Kelly Blue Book. “When you find out about a problem, you have to tell the government. The problem GM has is that it looks like they may not have been as forthright as they could have been.”

How much this issue will impact GM depends on whether investigations reveal that current GM executives were instrumental in hiding this information.

Listen to the full interview above.