GM Probed by US Over Ignition Recall Linked to 13 Deaths (1)

U.S. regulators are investigating
why General Motors Co. (GM:US) took years to recall 1.6 million small
cars over an ignition-switch defect linked to 13 deaths in
crashes.

The National Highway Traffic Safety Administration
announced the probe in an e-mailed statement. The agency could
fine GM as much as $35 million, which would be the most ever, if
it finds the largest U.S. automaker failed to pursue a recall
when it knew the cars were defective.

GM yesterday said it was “deeply sorry” as it more than
doubled the number of cars it will fix and expanded the number
of models to seven from two. The recall covers six models in the
U.S., including the 2005-2007 Chevrolet Cobalt, 2007 Pontiac G5,
2003-2007 Saturn Ion, 2006-2007 Chevrolet HHR, 2006-2007 Pontiac
Solstice and 2007 Saturn Sky.

“It is a major event for General Motors to apologize,”
said Clarence Ditlow, executive director of the Center for Auto
Safety, a Washington-based advocacy group that had pushed for
the expanded recall. “NHTSA will still want its penalty.
They’ll want to send a message to the other automakers to toe
the line better.”

The Detroit-based automaker, like other car companies,
faces a legal obligation to act on and report safety-related
defects in a timely manner. Congress last year increased the
maximum fines NHTSA can impose to $35 million to hold automakers
more accountable after Toyota Motor Corp.’s unintended-acceleration recalls in 2010.

GM said key rings that are too heavy or jarring can cause
ignition switches to slip out of the run position, in turn
causing the engines to shut off and a crash-sensing algorithm to
misfire in a way that deactivates the airbags.

Key Only

NHTSA is urging owners and drivers of the affected cars to
use only the ignition key while operating their vehicles, and to
take them in for the free repair as soon as it’s available, said
an agency spokesman, Nathan Naylor.

The agency will look at the frequency of the incidents, the
number of cars covered by the recall and the severity of
injuries in determining how much to penalize a manufacturer,
said David Strickland, NHTSA’s former administrator.

“They look at the egregiousness of the facts, whether a
manufacturer knew or should have known,” said Strickland, now
an attorney for Venable LLP in Washington.

To contact the reporter on this story:
Jeff Plungis in Washington at
jplungis@bloomberg.net

To contact the editor responsible for this story:
Bernard Kohn at
bkohn2@bloomberg.net