Recalled

2 minute read

General motors began investigating reports of faulty ignition switches in its vehicles back in 2001, but only within the past two months did the nation’s largest automaker finally take decisive action. The result: 2.6 million Cobalts and other small-engine cars are being taken off the road, but not before 13 deaths and 31 accidents were linked to the defective switches, which can cause air bags to fail. Called before Congress to explain what happened, new GM boss Mary Barra testified that the company is considering compensating families. Which means that just when GM was posting strong sales and seemed poised to leave the bailout era behind, it must once again pivot to regaining the trust of its customers.

THE VICTIMS

For advice on possible compensation for victims, GM tapped attorney Kenneth Feinberg, who is known for helping distribute cash to 9/11 families and those affected by the Boston Marathon bombings. “You don’t go to Ken unless you’ve got some troubles,” says NYU law professor Samuel Issacharoff. “It indicates a seriousness of purpose about getting things resolved without a full-on litigation war.” GM says Feinberg will help the company “explore and evaluate options” for providing restitution for accident victims and families.

WHO’S AT FAULT?

The National Highway Traffic Safety Administration oversees safety standards for U.S. automakers, but the agency says the data it reviewed in 2007 wasn’t sufficient to warrant a formal investigation, let alone a recall. “But if they took their mandate more seriously, they would’ve pursued this more seriously,” says CUNY public-health professor Nicholas Freudenberg. GM, which decided not to replace the switch in 2005 at a cost of about $1 per car, has opened an internal investigation into its own missteps.

THE ROAD AHEAD

GM has apologized but has done little to address perceptions of company negligence or propose a solution so it doesn’t happen again, says University of Southern California marketing professor Ira Kalb. After Toyota recalled millions of vehicles because of “unintended acceleration,” Kalb estimates, the company lost $9 billion in sales. Since then, Toyota has recovered enough to be the best-selling automaker globally for the past two years. Because Americans typically buy cars every six years or so, GM may benefit from consumer amnesia.

TO SEE WHICH AUTOMAKER HAS HAD THE MOST RECALLS, GO TO time.com/recall

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