In 2009, the U.S. Treasury committed $51 billion to resuscitate General Motors (GM). Many auto industry advocates may be ruing that decision, given GM’s recent behavior before Congress.
Just to recap: a faulty ignition switch – that’s been used in millions of GM vehicles for years – is being blamed for at least 13 deaths (possibly many more). Both the GM and the NHTSA acted extremely sluggishly to identify the problem and fix it. Neither regulators with the NHTSA, nor GM’s CEO, Mary Barra, have clearly explained why the company’s vehicles were allowed to remain on the road for years with these dangerous ignition switches in them.
The GM issue raises many troubling questions. Here are four:
1. Did the U.S. government make a mistake investing $51 billion in GM?
Critics of the 2009 auto industry bailout have been largely quiet for past few years, as U.S. automakers like GM rebounded in terms of profitability and public perception. But will this ignition switch fiasco affect confidence in the brand and management team? Consumer Reports recently rated Cadillac and Chevrolet near the bottom of the watchdog’s recent list of quality auto brands — CR only recommended about one out of four GM cars… and that’s before the ignition switch scandal broke.
2. What should be done about the NHTSA’s own sluggishness in this affair?
Officials at the NHTSA knew about ignition switch problem as early as 2007 – that’s 7 years ago! How come federal officials did not act more swiftly to hold GM accountable and to get the word out to dealers and consumers?
3. Can GM’s culture be fixed?
To repair a fast-fading auto industry, the federal government put General Motors through a “Quick Wash” bankruptcy, instead of a more conventional type of reorganization. Critics now suggest that this rapid process did not allow for the thorough purgation of managers and executives; instead, it perpetuated a broken corporate culture at GM.
4. What other undiagnosed (or-far-too-slowly diagnosed) defective auto parts problems are still killing American drivers?
Is GM’s ignition switch problem just tip of the iceberg? How many other as-yet-undiagnosed defective auto parts are causing accidents and leading to deaths and injuries?
Ideally, this Congressional fact finding process should culminate in the creation of a system that prevents (or at least minimizes) the recurrence of defective auto product nightmares.
If you or someone you love was hurt by a defective auto part (like the faulty GM ignition switch), the team here at Regan Zambri & Long can provide a free and confidential consultation. Call us now at (202) 759-6699 for trustworthy insight into your case.