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Reuters has a truly shocking report that’ll have General Motor’s public relations department scrambling: it turns out that the faulty ignition switch that GM reportedly decided to quietly not replace would have cost the company $1 on each car. The switch is blamed for taking 13 lives:
General Motors Co in 2005 decided not to change an ignition switch eventually linked to the deaths of at least 13 people because it would have added about a dollar to the cost of each car, according to an internal GM document provided to U.S. congressional investigators.
The U.S. House Committee on Energy and Commerce released the documents on Tuesday as lawmakers asked CEO Mary Barra why GM failed to recall 2.6 million cars until more than a decade after it first noticed a switch problem that could cut off engines and disable airbags, power steering and power brakes.
Colorado Congresswoman Diana DeGette cited a 2005 GM document that she said showed a cost of 57 cents per fix.
There must be lawyers all over the country salivating at this report.
DeGette did not release the document, and Reuters was unable to get a copy. However, Reuters obtained what appeared to be a separate document, a series of 2005 emails between GM engineers debating whether to make a change to the ignition switch. The change would have cost an extra 90 cents per unit and additional tooling costs of $400,000, one email showed. Those tooling costs typically are amortized over several years.
Barra said she found the concept of turning down the change because of tooling costs “very disturbing. That is not the way we do business in the New GM.”
In the email exchange, one of the engineers, John Hendler, said his team was prepared to continue using a switch that was made by Delphi Automotive and approved by GM, even though Delphi told the automaker in early 2002 that the switch did not meet GM’s performance specifications.
Hendler said the cars, including the Chevrolet Cobalt and Saturn Ion, which were recalled this year, would continue using the old switch “until the piece cost can be eliminated or significantly reduced,” and targeted a new switch for 2009 models. Reuters was unable to contact Hendler.
Another GM executive, Lori Queen, who had responsibility for the development of GM’s small cars, responded, “I’m not sure it’s ok to wait.” She did not explain herself in the email. Queen did not return a call seeking comment. A General Motors spokesman said the company was still investigating the recall and would review all relevant documents.
The report (which will scare some customers away in the future) and the legal action (which is bound to accelerate given this new tidbit) is likely to translate into a financial blow for GM. FOOTNOTE: I love GM cars. My last car was a 2004 Chevrolet Venture van.
Earlier this month I got another used car (this one a Dodge) because my van was finally giving me too much trouble. It’s milage? 322,000 miles. NO JOKE.
That GM vehicle was the best I’ve ever had.
And it had a switch that could have killed me.
Joe Gandelman is a former fulltime journalist who freelanced in India, Spain, Bangladesh and Cypress writing for publications such as the Christian Science Monitor and Newsweek. He also did radio reports from Madrid for NPR’s All Things Considered. He has worked on two U.S. newspapers and quit the news biz in 1990 to go into entertainment. He also has written for The Week and several online publications, did a column for Cagle Cartoons Syndicate and has appeared on CNN.