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GM Extends Filing Deadline for Compensation Fund, Did it Hide Ignition Switch Defect?

GM and its top executives have stated time and time again that they had no knowledge of the ignition switch defect at the top-levels of the company prior to alerting NHTSA of the defect in February 2014. Rather, they claim that all knowledge of the defect remained at lower levels of the company including at the production level and in the legal department. However, new information obtained from Delphi, GM’s ignition switch parts supplier, shows that the company, at large, had identified the problem and took corrective measures, but failed to notify federal regulators as required by federal law.

Furthermore, although fund administrator Kenneth Feinberg says that it is unrelated, following the discovery of another family who lost a loved one due to the ignition switch defect, the deadline to apply for GM’s compensation fund has been extended. We will also look at this latest reported wrongful death and information regarding the extended deadline.

Newly Released E-mails Reveal GM’s Actions in Lead-Up to Recall

The GM ignition switch recall has been one of the largest in the history of automotive safety. To date, the recall has affected nearly 30 million vehicles with 26.4 million of the affected vehicles being located in the United States. Furthermore, at least 27 deaths and hundreds of injuries have been linked to the switch problem. Unfortunately, it appears that at least some of those injuries and deaths could have been prevented, but for GM’s delay in notifying customers and federal regulators about the ignition switch defect.

While e-mails from 2005 where a GM employee warned about a “serious safety problem” and that a “big recall” might be required have long been known, recently released emails from the end of 2013 and beginning of 2014 show that GM’s failures to take necessary steps continued until just days before the recall’s announcement.

A December 18, 2013, email, in part, reads “…I am looking for a build and ship plan for a large volume of this part to support an urgent field action for our customers.  I will need to secure a total of 500,000 pcs, at this time. I am not sure if you have any stock you can provide prior to the Holiday break or not…”

Delphi employees seemed taken aback by both the size of the order and GM’s failure to reach out to its supplier sooner so that recalls plans could have been better coordinated. In an e-mail exchange, one Delphi employee wrote to another, “…I can’t believe they would enter anything for a high-volume field fix/campaign before discussing the issue with the supplier….”The same GM employee acknowledged the Delphi employees’ concerns stating that “Yes, it is a huge increase.” Furthermore, once again, illustrating the urgency of the situation the GM employee indicated that “[She] would need to start seeing shipments ASAP … Please put together and [sic] aggressive plan and I can adjust accordingly.”

By mid-January emails from GM to Delphi had become rather frantic. An email on January 15, 2014, stated, “I left you another message. Please get back with me today with your ship plan. Please understand that we have to be able to provide timing and see what we can do to improve it. Delphi was notified of this urgent issue before Christmas and I have yet to see a plan. Please get me something by 4 pm today!!”

Inspecting Crash - GM Extends Filing Deadline for Compensation Fund, Did it Hide Ignition Switch Defect?

E-mails indicate that by January 21st Delphi had provided GM with a shipping schedule for the replacement ignition switches. GM, however, did not initiate its recall until February 13th –2 months after the initial e-mail and about two weeks after receiving the shipment schedule. Federal law requires large vehicle producers, like General Motors, to report defects to NHTSA within 5 days.

In short, what these emails show is that GM was aware of the defect and was aware that a recall was not only likely but assured. Despite having this knowledge GM failed to inform regulators or make customers aware so that they could alter their driving habits.

Could More Decisive Action Have Saved Lives?

While it is impossible to know exactly how a counter-factual scenario might play out, there are certain lessons and reasonable deductions we can draw based on the type of defect and the proposed workarounds.

First, it is known and uncontroverted that the ignition switch defect was made more likely to occur when the ignition key also supported a heavy key chain or key ring or other objects. In fact, one of the workarounds that GM suggested to owners of affected vehicles was to “use only the ignition key with nothing else on the key ring.”

If GM had issued this warning earlier it is likely that more owners of affected vehicles could have heeded the warning, removed heavy objects from their keys and brought their vehicle in to be serviced. Furthermore, it is at least conceivable that had these workarounds and corrective actions had been announced earlier, their application could have prevented occurrences of the defect and resulting accidents & catastrophic injuries.

However, please remember that removing heavy objects from the key ring will not fix the ignition switch defect in your vehicle – it is merely a temporary workaround. The only way to correct this dangerous condition is to have your vehicle serviced and the ignition switch replaced.

For its part, GM has not denied the authenticity or the seriousness of the emails. A spokesman for the company characterized the recently released emails as just one more piece of evidence regarding the handling of safety defects and vehicle recalls at GM. He stated, “These e-mails are further confirmation that our system needed reform, and we have done so.”

GM Extends Compensation Fund Deadline For Ignition Switch Defect Victims

While the compensation fund was initially set to close on December 31st, 2014, the deadline has been extended by one month to January 31st, 2015. Although fund administrator Ken Feinberg claims it is unrelated, the extension was issued in the wake of the discovery of another ignition switch victim who was counted as one of the 13 deaths by GM’s legal department, but her family was never notified by GM. In fact, the family was unaware that it was eligible for the compensation fund until they were informed by a reporter for the New York Times. Despite claims of good-faith efforts by GM to notify families, it appears that this lack of notification is a pattern. The Times reports that the families of the 12 other victims identified by GM legal were also not notified by the company.



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