Consumer Watchdogs Call for GM Recall InvestigationDecember 10, 2014
A nonprofit consumer protection group has requested a GM recall investigation into possible federal involvement in postponing the automaker’s ignition switch recall. A letter from the National Legal and Policy Center alleges that the federal government deliberately timed the sale of its last shares in General Motors to close prior to the news of the car manufacturer’s ignition switch issues reaching the public. The letter also calls for a GM recall investigation into the timeline of when and how company executives, such as chief executive officer Mary Barra, knew about the ignition switch problems.
GM Recall Investigation Questions Timeline
In the letter requesting the independent GM recall investigation, NLPC President Peter Flaherty told Congressman Jason Chaffetz (R-UT) that the timeline proposed so far “defies common sense.” Mr. Flaherty pointed out testimony in a February 2010 House Oversight Committee hearing. At the time of the hearing, GM had received more than 1,000 complaints about the ignition switches in the Chevrolet Cobalt. Despite the complaints, then-Secretary of Transportation Ray LaHood stated that he “was unable to explain” why there was no federal GM recall investigation into the defective switches.
Replacement Order Cited As Cause For GM Recall Investigation
Mr. Flaherty also called into question the timing of why the company ordered more than 500,000 replacement ignition switches, barely a week after the federal government divested itself of the troubled automaker. A report in the Wall Street Journal revealed that emails between parts manufacturer Delphi and GM showed the emergency order, one of the largest parts orders on record. The internal GM recall investigation did not reveal the emergency order, nor did the company mention the massive order to federal regulators until two months later.
GM Recall Investigation And Stock Prices
Another fact that Mr. Flaherty cited in his letter requesting the GM recall investigation stems from the automaker’s stock price. When the federal government purchased shares in the then-failing automaker in 2008, the company’s stock was at near-record lows. A week after the government divested itself of its shares in December 2013, GM stock hit an all-time high. On December 17, GM reportedly held an executive-level meeting to discuss the ignition switch issue. The next day, the company ordered 500,000 replacement switches from Delphi.
Feds Start Preliminary GM Recall Investigation
Mr. Flaherty’s letter points out that the National Highway Transportation Safety Administration’s initial GM recall investigation in 2010 failed to find fault with the automaker, “even in the light of overwhelming evidence,” a problem which he described as “deeply troubling.” He also stated that the Department of Justice has opened a preliminary GM recall investigation earlier this year, but has not yet submitted its findings to Congress.
Source: Auto World News
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