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Roundup of Latest Developments in GM Recall Saga – Part 2

Posted By Regan Zambri & Long || 15-Jul-2014

How long will GM continue to announce recalls for its vehicles in 2014? Why is the company issuing so many diverse recalls?

According to a May 27 CBS news analysis, Ryan Johnson of Barclays Capital said that GM will continue to issue recalls “through mid-summer.” Yet despite the torrent of bad press for the company — among other things, the automaker was forced to recall 2.6 million vehicles just for the ignition switch issue as well as pay a $35 million fine to the Department of Transportation — sales of GM vehicles have remained steady in 2014.

Why is this?

Perhaps consumers are not fully aware of what’s happened with the defect switch and the recall, or maybe they know and just don’t care. In either case, GM is clearly in the throes of an interesting transition. Johnson reports that, in the wake of the ignition switch fiasco, the company has been scrambling to comb through its data to identify other potential problems and fix them, ASAP, to prevent more embarrassment and Congressional hearings.

Johnson writes “it is tough to say if recalls from past vehicles have already peaked, as the team has not completed mining the data.” GM is vetting potential problems on an “issue-by-issue [basis] and not on a make and model year basis.”

Other sources report that GM aims to revise (and potentially reengineer) its internal safety vetting processes to avoid further embarrassment and fines. This vetting process may explain the flurry of recent recalls.

Federal guidelines say that automakers like GM must notify the National Highway Traffic Safety Administration (NHTSA) within just five days of finding a defect that could be a safety issue. To that end, GM’s house cleaning efforts have exposed some oddball problems.

In May, for instance, GM recalled 500 SUVs and pickups per a faulty air-bag component.

But May was not all bad for GM: on the legal front, a court in Texas delayed four separate lawsuits brought by customers in Texas against General Motors and a codefendant, Delphi Automotive Systems, LLC.

How can we put what’s been happening with GM into a better context? What’s the real root cause of the fines, defective parts, engineering problems, managerial snafus, etc?

It’s easy to jump to premature conclusions. But the issue is complicated, and it involves many “moving parts” (so to speak). Possible root causes of GM’s recall issues might include:

•    An inefficient/ineffective management culture at GM;
•    Poor engineering processes and/or a sluggish bureaucracy at the company;
•    Poor oversight of the automaker from federal and state regulators;
•    A national tort reform movement, which has limited the power, scope, and investigative capacities of personal injury attorneys, who might otherwise have been able to bring attention to the problems earlier in the process;
•    The fact that Americans (and federal regulators) have been distracted by other problems.

If you or someone you love was hurt in a GM related accident in Washington D.C., you need to get clarity about your personal rights and responsibilities under the law. Call the Regan, Zambri & Long team today for a free and confidential consultation about your Washington D.C. accident: (202) 759-6699.
 

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