Product Liability

Feds look for evidence of cover-up in GM ignition switch investigation

GM logo Feds look for evidence of cover up in GM ignition switch investigationToyota Motor Corp.’s admission last week that it intentionally misled customers and federal authorities about the extent of sudden unintended acceleration problems in its vehicles resulted in a $1.2 billion penalty — the largest fine against an auto manufacturer in U.S. history. But does General Motors face a similar fate for its failure to recall faulty ignition switches in a timely manner?

It’s a possibility that likely has GM executives on edge as the company has only recently reclaimed its steady footing after a 2009 government bailout saved the automaker from extinction. Court documents and other evidence indicate that GM has known about its potentially deadly ignition switch problem for at least 10 years, yet the company didn’t begin recalling the affected vehicles until last month.

The fact that GM violated federal rules by waiting so long to recall the faulty vehicles isn’t itself the focus of the criminal probe; it’s whether or not GM officials actively worked to keep the National Highway Traffic Safety Administration (NHTSA) and the American public in the dark about the safety of its vehicles.

“The oldest maxim in the book is that it’s not the crime, it’s the cover-up,” a lawyer handling automotive cases told Law360. “To actively mislead regulators or law enforcement personnel is always going to result in a worse situation than whatever the underlying wrongdoing was.”

Like GM, Toyota delayed notifying federal regulators and customers of safety problems in its vehicles. The Japanese automaker recalled millions of vehicles for floor mat entrapment in 2009, but it had received reports about the problem in at least 2007, likely earlier. Meanwhile, Toyota dealt with an accelerator pedal defect in Europe in 2008, but did not recall its vehicles affected by the same problem until 2010.

While GM’s recall delay was obviously more severe, the company has not admitted to authorities that it worked to mislead regulators and customers, saying only that its way of dealing with the potentially deadly defect could have been “more robust.”

Federal officials have given GM an April 3 deadline to answer dozens of questions related to its knowledge of the ignition switch defect. Investigators are currently focusing on what GM officials knew and why they failed to act.

A study commissioned by the Center for Auto Safety found that as many as 303 lives may have been spared had GM immediately fixed the ignition switch defect, which potentially allows keys to slip from position and cut power to the engine, steering, brakes, and airbags.