Consumer Group Investigates GM Ignition Switch Cover-Up, Seeks Records

General Motors (GM) is attempting to avoid providing a consumer watchdog group with access to certain information surrounding the recent ignition switch recall, which has impacted millions of vehicle and may have caused dozens of accidents and deaths. 

The Center for Auto Safety (CAS) is investigating whether GM purposefully duped the government and taxpayers in 2009, when the automaker sought bankruptcy protection and a $50 billion bailout.

Last week GM, asked a federal judge to deny the group access to what it says is confidential business information.

According to releases and statements made by CAS officials, the group appears to suspect that GM actively hid the ignition switch problem during the bankruptcy proceedings, knowing that once it was through its bankruptcy, it would have a layer of legal protection between the “new” GM and the ignition switch decisions made by the company in its previous incarnation.

As early as 2011, CAS sued the Department of Treasury for business information that GM surrendered before the bailout. The CAS is seeking documents on the deal between GM and the U.S. government, which the group says allowed GM to walk away from liability responsibilities to accident victims.

GM says that the confidential information sought by CAS goes far afield of those purposes, however.

In February, GM initiated a recall due to ignitition switch problems. While the recall initially impacted only 800,000 vehicles sold in the United States, it has since been expanded several times to include more than 2.5 million Chevy Cobalt, Chevrolet HHR, Pontiac G5, Pontiac Pursuit, Pontiac Solstice, Saturn Ion and Saturn Sky vehicles from specific model years between 2005 and 2010.

The vehicles may have defective ignition switches that pose of risk of shutting the car down suddenly if heavy key chains are used or if the ignition is jarred, such as may occur in an accident. This could cause a driver to lose control of the vehicle or prevent the airbags from deploying in an accident, increasing the risk of serious injury or death.

While GM has said that only 13 deaths so far have been linked to the ignition problems, CAS says its own analysis of accident reports submitted to the National Highway Traffic Safety Administration (NHTSA) found hundreds deaths involving recalled GM vehicles where air bags failed to deploy.

Late last month, GM acknowledged that they now believe at least 47 crashes can be directly linked to the ignition switch problems, but the automaker continues to maintain that only 13 deaths appear to be linked to the problem. However, acting director of NHTSA, David Friedman, weighed in and indicated last week that the agency also believes that the GM recall death toll will rise as the investigation continues.

GM has pledged to compensate victims of auto accidents who died due to air bag failures in the recalled cars. However, the financial cost to the company could be drastically different if hundreds of deaths are linked to the recalled vehicles instead of just 13.

Fraud, Cover-Up Allegations

GM has faced sharp criticism over the handling of the recall, after it was discovered that the automaker knew about the defect for years and failed to take any actions to correct the problem or warn consumers.

On May 29, CAS wrote a letter to Anton Valukas (PDF), an independent investigator leading an internal investigation into what led GM to cover up the ignition switch problem for years. The letter urged Valukas to look into allegations that the company deliberately tricked government officials to mislead them about the problems. According to CAS, once GM officials realized there was a problem with the ignition switches, they changed a vital part to correct the problem, but did not change the part number, knowing that federal investigators relied on those part numbers for their investigations.

“Unbeknownst to NHTSA, the agency was looking at a mix of old bad parts with high failure rates and good new parts with lower failure rates,” the letter states. “Your investigation must probe whether this was a deliberate fraud by GM personnel who knew exactly how NHTSA operated and that the agency would not open an investigation where the failure rate had fallen so sharply.”

Last month, the NHTSA fined GM a record $35 million over their handling of the recall. The automaker also agreed to submit to extensive government oversight as part of a consent agreement designed to change the culture of the company, which Friedman said was “deeply disturbing” in its decision to place profits over customer safety.

A growing number of GM recall lawsuits continue to be filed in state and federal courts throughout the United States, including personal injury claims, wrongful death claims, investor lawsuits and other class actions over the diminished value of the vehicles. All of the complaints involve similar allegations that GM failed promptly act to correct the ignition problems, and actively tried to conceal the issue by blaming incidents on driver error.

While GM has indicate it will compensate families of those killed in auto accidents where the defect may have been a factor, the company has decided to battle against those seeking economic damages. The company claims that its 2009 bankruptcy precludes any economic lawsuits involving company actions before the reorganization.

Photo Courtesy of Mrs. FireMom via Flickr Creative Commons