WATCH: Americans Still Love Buying SUVs

GM lost billions of dollars due to recalled vehicles, but sales are actually up thanks largely to SUVs.

TIME auto industry

GM Recalls Another 7.6 Million Vehicles

Six recalls announced on Monday greatly expand total number of recalled vehicles to over 25 million


GM announced Monday that there will be six more safety recalls involving 7.6 million vehicles made from 1997 to 2014.

Among the recalled vehicles, GM said it is aware of seven crashes, eight injuries and three fatalities. “We undertook what I believe is the most comprehensive safety review in the history of our company because nothing is more important than the safety of our customers,” GM CEO Mary Barra said in a statement on the company’s website. “Our customers deserve more than we delivered in these vehicles.”

“We have worked aggressively to identify and address the major outstanding issues that could impact the safety of our customers,” Barra said. “If any other issues come to our attention, we will act appropriately and without hesitation.”

The latest recall brings the number of vehicles affected to over 25 million, USA Today reports. GM expects to set aside $1.2 billion in the second quarter for the cost of recall-related repairs, which includes $700 million already announced.

TIME career

Matt Lauer Asked Mary Barra If She Can Be a Good Mom and Run GM

GM CEO Mary Barra Testifies At House Hearing On Ignition Switch Recall
General Motors CEO Mary Barra testifies during a House Energy and Commerce Committee hearing on Capitol Hill on June 18, 2014 in Washington, DC. (Mark Wilson--Getty Images) Mark Wilson—Getty Images

Just months after Sen. Barbara Boxer said she was disappointed in Barra "woman to woman."

In an exclusive TODAY show interview with Mary Barra, Matt Lauer asked the General Motors CEO if it was possible for her to run a major automaker and be a good mom at the same time.

Here’s a transcript of that part of the interview:

LAUER: You’re a mom, I mentioned, two kids. You said in an interview not long ago that your kids told you they’re going to hold you accountable for one job and that is being a mom.

BARRA: Correct. (smiling.)

LAUER: Given the pressures of this job at General Motors, can you do both well?

BARRA: You know, I think I can. I have a great team, we’re on the right path…I have a wonderful family, a supportive husband and I’m pretty proud of the way my kids are supporting me in this.

Lauer also asked her about the speculation that despite her 30 years of experience at the company, she may have gotten the job because of the desire to have a maternal figure guide the company through a rocky time.

LAUER: I want to tread lightly here. You’ve heard this, you heard it in Congress. You got this job because you’re hugely qualified, 30 years in this company a variety of different jobs. But some people are speculating that you also got this job because as a woman and as a mom because people within General Motors knew this company was in for a very tough time and as a woman and a mom you could present a softer image and softer face for this company as it goes through this horrible episode. Does it make sense or does it make you bristle?

BARRA: Well it’s absolutely not true. I believe I was selected for this job based on my qualifications. We dealt with this issue — when the senior leadership of this company knew about this issue, we dealt with this issue.

This interrogation comes just a few months after Sen. Barbara Boxer (D-Calif.) told Barra during her Senate questioning that “woman to woman, I’m disappointed.”

How’s this for a question: Can Matt Lauer be a good dad and host the Today Show? Let’s discuss.

TIME Autos

General Motors Tells Dealers to Halt Sales of Chevy Cruzes

Due to an airbag issue, 2013 and 2014 models of the Chevy Cruze are being held at dealerships in North America


Chevrolet Cruze models from the last two years have been ordered off dealer lots by General Motors, due to a potential issue with the car’s airbags.

Company spokesmen Jim Cain said in a statement that some vehicles from 2013 and 2014 “may be equipped with a suspect driver’s airbag inflator module that may have been assembled with an incorrect part,” USA Today reports.

The Detroit-based motor company has recalled an unprecedented number of vehicles so far this year. This latest glitch is unrelated to another recall issued earlier this week for the embattled car maker’s Takata airbags, which expel debris when released.

USA Today reports it’s also the second order to stop selling Cruzes issued in 2014. In March, an issue with a front axle shaft led to a stop-sale order and later the recall of over 150,000 cars.

Automotive News broke the story after it obtained a copy of the stop-delivery notice for the Cruze model on Wednesday. The notice had been sent to dealers a day prior.

[USA Today]

TIME General Motors

GM’s Mary Barra Back in the Hot Seat on Capitol Hill

GM CEO Mary Barra Testifies At House Hearing On Ignition Switch Recall
General Motors CEO Mary Barra (L), and Anton Valukas, head of GM's internal recall investigation, field questions while testifying during a House Energy and Commerce Committee hearing on Capitol Hill on June 18, 2014 in Washington, DC. Mark Wilson—Getty Images

"It is enormously painful to have our shortcomings laid out so vividly," General Motors CEO told lawmakers at a hearing over defective engine parts

General Motors CEO Mary Barra was grilled by lawmakers over a lethal defect in vehicle ignition switches once again Wednesday, expressing regret for lax oversight, while promising skeptical lawmakers that quality controls had improved across the company.

Lawmakers on the House Subcommittee on Oversight and Investigations criticized GM managers for fostering a “culture of secrecy” that allowed knowledge of defective engine parts to remain concealed within the company for more than a decade.

Faults in the ignition switches have been linked to 56 accidents in which car engines and air bags suddenly switched off while the car was in motion. GM has admitted faulty switches played a role in 13 deaths, though advocates have claimed more lost their lives.

Barra, who had already appeared before the House Energy and Commerce Committee in April, called the findings of an internal investigation into the ignition switch defects “brutally tough and deeply troubling.”

“For those of us who have dedicated our lives to this company, it is enormously painful to have our shortcomings laid out so vividly,” Barra said in her opening statement to the House Subcommittee on Oversight and Investigations. She said the company has since fired 15 employees and beefed up its staff of safety investigators.

Skeptical lawmakers pressed Barra on the extent of the fixes. “You mentioned 15 were fired,” Rep. Timothy Murphy (R-Penn.) said to Barra, “99.999 percent, if my math is right, of the people [still at GM] are the same … If you haven’t changed the people, how do you change the culture?”

The questioning narrowed in on the role of senior managers, including Barra, who claimed to have no knowledge of the faulty switches until 2014. “That the most senior GM executives may not have known about a defect that caused more than a dozen deaths is frankly alarming and does not absolve them of responsibility for this tragedy,” said Rep. Diana DeGette (D-Colo.). The company’s “culture of secrecy” must be changed, she added.

Lawmakers also raised concerns about GM’s successive waves of recalls. GM has issued 44 recalls for 20 million vehicles worldwide. GM says defects related to more recent recall notices have not been linked to any known deaths or injuries. Nonetheless, Rep. Murphy called the most recent call, on Monday, “hauntingly similar to the Cobalt ignition switch recall.”

Barra said GM was currently preparing a compensation fund for victims families that would begin processing claims by Aug. 1st. “I want this terrible experience permanently etched in our collective memories,” Barra said.


Morning Must Reads: June 12

The early morning sun rises behind the US Capitol Building in Washington, DC. Mark Wilson—Getty Images

In the news: Iraq creeps closer to "all-out" sectarian conflict; What went wrong with Eric Cantor and the fight to take his leadership post; proof of a partisan U.S.; what's prettier in print

The Morning Must Reads is published daily on weekdays.

TIME Business

Ralph Nader: GM Must Pay Big for What Was Clearly an Institutional Cover-Up

GM CEO Mary Barra Testifies To House Hearing On The Company's Ignition Switch Recall
General Motors Company CEO Mary Barra testifies during a House Energy and Commerce Committee hearing on Capitol Hill, on April 1, 2014 in Washington, DC. Mark Wilson—Getty Images

Top management must be held accountable for a pattern of inaction and the auto company's uncommunicative committee structures.

The ongoing and tragic General Motors debacle involving the mishandling of the fatal ignition switch defect reached its latest milestone with the release last week of a company-commissioned 315-page report by former U.S. Attorney Anton Valukas. Valukas condemned GM’s “troubling disavowal of responsibility” that led “to devastating consequences.” He declared that for more than a decade, the facts about these faulty switches that took the lives of motorists by stalling and depowering the vehicles thrashed around an “astonishing number of committees” inside GM’s sprawling silo-like bureaucracy.

What Valukas delivered for top GM management was concisely described by Sen. Richard Blumenthal (D-CT), who said, “It seems like the best report money can buy. It absolves upper management, denies deliberate wrongdoing and dismisses corporate culpability.”

The Valukas Report concluded that there was no cover-up, even though GM’s new CEO Mary Barra attributed the delay to a “pattern of incompetence and neglect.” She dismissed mid-level employees, some senior level managers, disciplined five others and installed new executives to supposedly shape up the place.

In her speech to 1,000 GM employees, Barra began to get at the core problem when she declared that employees should report failures to their supervisors and, if that doesn’t work, to “contact me directly.” This is not remotely the right sequence. Few employees would expose their careers to such potential retaliation by the “cover their rear” attitude of the GM hierarchy.

The report cites what has become known as the “GM nod”: “The GM nod, Barra described, is when everyone nods in agreement to a proposed plan of action, but then leaves the room with no intention to follow through, and the nod is an empty gesture.” Other witnesses explained the “GM salute, a crossing of the arms and pointing toward others, indicating that the responsibility belongs to someone else.”

Meanwhile, year after year, nearly 3 million Chevrolet Cobalts and Saturn Ions, among others, carried this lethal but easily fixable defect, resulting in highway crashes, deaths and injuries. Not until February of this year did GM announce the recall of millions of these cars. Nor did the Department of Transportation act to compel such a recall, even though it knew about the defect for years. Finally, this year, it fined GM the maximum sum of $35 million.

How can top management not be held accountable for such a pattern of inaction, such a miasma of evasive, uncommunicative committee structures, such a malfunctioning chaos of mortal information not being passed on to the top officials of the company? Taken together, it clearly was a 13-year institutional cover-up.

Clarence Ditlow, longtime GM watchdog and head of the Center for Auto Safety, which I co-founded, called the Valukas report “little more than an elaborate whitewash that buys into GM’s arguments that it was a bunch of incompetent engineers, lawyers and mid-level managers who were fired as a result.” Ditlow argues that “GM has a corporate culture where denying safety problems has been prevalent and taking responsibility for safety defects has been rare.” He also faulted the report’s “buying into the company’s argument that this is just an airbag defect – yet stalling has been the subject of over 300 safety recalls from all companies from 1966-2013. The Valukas report ignores the 2004 death and injury Early Warning Reports (EWR) filed by GM on the models covered by the ignition switch recall through 2013.”

Incredibly, the ignition switch hazard was classified as a “customer convenience issue,” rather than an urgent safety failure. But as former National Highway Traffic Safety Administration physicist Dr. Carl E. Nash told me, GM has a long history of denial, delay, cover-ups and blaming everyone but itself for millions of serious defective motor vehicles.

GM is bracing for the results of the Justice Department’s criminal investigation, the Securities and Exchange Commission’s probe, and the two Congressional Committees’ ongoing inquiries, all of which lie ahead. But on its own, GM must act to compensate the bereaved families and the injured survivors in product-defect crashes both before and after its 2009 bankruptcy and its $50 billion government bailout. The kangaroo court of corporate bankruptcy dissolved existing personal injury claims, stripping the victims of their constitutional rights to have their day in court.

Secondly, shuffling personnel and rearranging committees will not do the job Barra says she wants done. What will be effective is if she establishes an independent ombudsman who confidentially receives complaints from internal whistle-blowers and reports them directly to GM’s CEO and President, as well as to the Department of Transportation. As Nassim Taleb wrote in his recent book Antifragile, nothing is more productive of accountability than top bosses having “skin in the game.”

Providing a monetary incentive to the reporting employee for saving the company a boatload of trouble and averting highway tragedies will also help. Companies often give money to workers who suggest dollar-saving ways to run production or distribution lines. GM can certainly do the same for internal life-saving reports by conscientious GM personnel.

Ralph Nader is a consumer advocate and author of Unstoppable: The Emerging Left-Right Alliance to Dismantle the Corporate State.


5 Times That GM Could Have Saved Lives But Didn’t, According to GM

GM CEO Mary Barra Holds Press Conference On Ignition Switch Recall
General Motors Chief Executive Officer Mary Barra sits for a press conference at the General Motors Technical Center on June 5, 2014 in Warren, Mich. Bill Pugliano—Getty Images

General Motors employees shirked responsibility at key moments and didn't fix a faulty ignition switch, causing the deaths of more than a dozen drivers, according to a new report

General Motors CEO Mary Barra hasn’t spared a “mea culpa” in her handling of the automaker’s faulty ignition switch crisis. In a strategy as moral as it is shrewd, Barra has taken personal responsibility for fixing deep problems at GM, and that includes accepting the results of a damning report published Thursday by GM-hired attorney Anton Valukas.

The investigation places blame for more than a dozen deaths squarely on the automaker’s employees, accusing engineers of a “history of failures,” and shirking responsibility in fixing the engineering issues. GM’s Valukas traced the history of the company’s faulty ignition switch, which was in the Chevrolet Cobalt, Saturn Ion, and other models. When slightly grazed, the switch powered the car off and disabled the airbags. Ultimately, the report concludes, it was GM’s negligence in fixing the switch that led to the deaths of more than a dozen people.

There’s nothing groundbreaking in that conclusion. And the report doesn’t implicate Barra or the company’s top brass. But the GM investigation does highlight in unprecedented detail the failures of specific employees to address the switch issue.

Here are five instances in which GM could have saved lives, but didn’t.

1. Ray DeGiorgio, the GM engineer in charge of the prototype ignition switch knew by early 2002 that the part didn’t meet specifications. Delphi, the company testing the switch, told DeGiorgio repeated tests had failed, marking each test result in a January report with “Not OK.”

DeGiorgio had a choice: fix the switch, or ignore the problem. Knowing that fixing the switch would delay production, DeGiorgio told Delphi in email to “maintain present course;” in other words, ignore the problem. He signed his email “Ray (tired of the switch from hell) DeGiorgio.” DeGiorgio, who was fired this year, couldn’t be reached for comment.

2. Reviews in the middle of 2005 of GM’s Cobalt, which contained the below-spec ignition switch, were not good. For months, GM employees had exchanged emails noting that a slight graze of the key fob would move the key out of run, shutting off the vehicle. Media reports were vitriolic. “I never encountered anything like this in 37 years of driving and I hope I never do again,” said a reviewer for the Sunbury Daily Item said of his Cobalt’s repeated engine shutdowns, and the New York Times noted Chevrolet dealers were telling Cobalt owners to remove items from heavy key rings. “This is a safety/recall issue if ever there was one,” a customer wrote GM.

Yet despite the obvious dangers of ones car shutting off mid-drive, GM continued to classify the faulty ignition switch as a convenience issue—not a safety one. A team of GM engineers met in September 2005 to consider whether to replace the switch. The answer was a fatal “no.”

3. GM lawyers reviewed a case in 2006 in which a woman died after her Cobalt struck several trees and her airbag did not deploy. Field reports noted that the ignition was oddly in the accessory power mode, but a GM engineer, Kathy Anderson argued that the airbag was not expected to deploy anyway. The case was settled, effectively quelling a deeper investigation into the death, and the possibility of discovering the real source of the problem.

4. A 2007 report by Wisconsin State Trooper Keith Young said that the ignition switch jostling may have caused a fatal crash. “The two front seat airbags did not deploy,” said Young. “It appears the ignition switch had somehow been turned from the run position to accessory prior to the collision with the trees.” GM received the report, but according to the Valukas investigation, no GM engineer read it for seven years.

5. DeGiorgio quietly fixed the ignition switch problem in 2006, but didn’t tell anyone at GM. Nor did he switch the part number in GM records. That meant that all future cars would be safe, but it would be nearly impossible to trace the cause of crashes on old models to the ignition switch—preventing a recall that would have saved lives.

More than specific instances, however, it was a lack of initiative among GM employees to take responsibility that caused more than a dozen deaths, the Valukas investigation makes clear. But the story is far from over: the Justice Department, the Securities and Exchange Commission and a group of state attorneys general, and GM is figuring out to compensate its victims of the crash.

TIME Autos

General Motors Fires 15 People Linked to Recall Scandal

An internal GM report found no deliberate cover up and said the top management did not know about the defect until the recall


General Motors CEO Mary Barra said Thursday the automaker has fired 15 people and disciplined five others following an internal investigation into why it took more than a decade to address a defect that’s led to the death of at least 13 people.

“Some were removed because of what we consider misconduct or incompetence. Others have been relieved because they simply didn’t do enough: They didn’t take responsibility; didn’t act with any sense of urgency,” Barra said.

However, Barra said the report found no deliberate cover-up by the company — GM’s top management was unaware of the problem until the company decided to begin recalling millions of affected vehicles earlier this year, according to the report. Instead, Barra put the blame on “a pattern of management deficiencies and misjudgments.”

GM top brass ordered the report, conducted by former U.S. Attorney Anton Valukas, after the company began massive recalls in February because of defective ignition switches, which caused some cars to lose power steering and airbag functions. The report laid out a series of findings and recommendations that Barra said the company had already begun to undertake.

GM has recalled at least 13.5 million vehicles for various issues this year, 2.6 million of which because of ignition switch problems. The recalls came after the company was put under intense pressure from Congress and federal authorities for its failure to fix the switch issues for more than a decade. On Thursday, Barra suggested that more recalls will follow.

“As I’m sure you know, we are taking an aggressive approach on recalls,” she said. “In the near term, you might expect to see a few more recall announcements.”

Barra also announced a compensation program for victims seriously injured as a result of the defective ignition switch as well as the families of those killed in connection with the problem. The program, which will be administered by Kenneth Feinberg — who ran the September 11th Victim Compensation Fund — will begin accepting claims on Aug. 1.

TIME Autos

GM Disputes Report Tying Ignition Switch Problem to 74 Deaths

GM Ignition
Shop foreman John Chapman installs tumblers for the key cylinder during a service recall on a General Motors Co. (GM) 2005 Chevrolet Cobalt at Liberty Chevrolet in New Hudson, Mich., April 25, 2014. Jeff Kowalsky—Bloomberg/Getty Images

GM is sticking with its original number of 13 after a Reuters analysis claimed 74 people died from problems related to a faulty ignition switch

General Motors is standing by its estimate that a faulty ignition switch which triggered a massive recall was responsible for 13 deaths after a new report says the actual number is several times that.

Reuters said in an analysis published Tuesday that the number of deaths tied to the problem is at least 74. Reuters calculated its number using the Fatality Analysis Reporting System (FARS), a government database that contains accident reports from U.S. law enforcement agencies. GM, however, says it uses more detailed information when investigating accidents.

“GM arrived at the figure of 13 fatalities by assessing the detailed information in the claims data available to us,” the company said in its defense, CNN reports.

GM and Reuters both looked at accidents wherein drivers or passengers in the front seat were killed in head-on collisions with one other vehicle during which the GM vehicle’s airbag did not deploy.

GM recalled 2.4 million vehicles over the past several months after it was discovered that a problem with their ignition switch caused cars to shut off while driving, disabling power steering, anti-lock brakes and airbags.

The National Highway Traffic Safety Administration did not comment on the Reuters figures, but it previously said the final number of deaths will likely be higher than 13.


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