Even after recall repair, GM recommends only key, fob on key ring

Reuters

By Ben Klayman

DETROIT, March 12 (Reuters) - General Motors Co said on Wednesday that even after the vehicles in its ignition-switch recall are repaired, owners should still have only the key and fob on the key ring.

GM has been telling the owners of the more than 1.6 million vehicles with the faulty ignition switches linked to 12 deaths that until the repairs are made only the key should be on the key ring. That remains largely the case after the fix as well, according to a document filed with U.S. safety regulators.

"We recommend that customers only utilize the key, key ring and key fob (if equipped) that came with the vehicle," GM said in the document filed with the National Highway Traffic Safety Administration. That was in response to a question about whether customers can put their heavy key ring back on after the repair is completed.

A GM spokesman said after the repair is completed, there is no danger of the problem reoccurring.

Automotive research firm Edmunds.com said while there is anecdotal evidence owners should avoid too much weight on their key rings, there is no industry standard language on that subject.

GM disclosed how it is answering customer questions related to last month's recall in a "frequently asked questions" document filed with NHTSA.

The Detroit automaker also said in the filing that it will offer loaner cars in some cases and a $500 cash allowance to unhappy owners affected by the recall.

The problems in the affected vehicles in some instances allowed the engine and other components, including front airbags, to turn off while the vehicle was traveling at high speed. GM previously had said there were 13 deaths linked to the faulty ignition switch, but revised that to 12 on Tuesday because it had double-counted one incident.

The failure is believed to be caused when weight on the ignition key, road conditions or some other jarring event causes the ignition switch to move out of the "run" position, turning off the engine and most of the car's electrical components mid-drive, with sometimes catastrophic results.

GM said in the NHTSA document on Wednesday that it is providing rental or loaner vehicles in some cases.

The company also said it is not buying back affected vehicles if owners ask for that, but is offering a $500 special cash allowance, through April 30, to buy a 2013, 2014 or 2015 model-year vehicle.

"This special cash allowance must be passed on to the eligible customer at the time of the transaction and is in addition to other national and regional offers," GM said in the filing. "The special cash allowance is not transferable and is intended to assist those customers who are unhappy and may want to trade out of their vehicle or buy a new GM product.

"GM will not market or solicit owners using this allowance," the company added. "We ask that dealers do not market to or solicit these customers either. This special cash allowance is not a sales tool; it is to be used to help customers in need of assistance."

On Tuesday, a source said federal prosecutors have opened a probe of GM, examining whether the company is criminally liable for failing to properly disclose problems with some of its vehicles that led to the recall.

The federal probe by the U.S. attorney in Manhattan adds to a growing list of U.S. authorities examining the recall, which GM announced in February. NHTSA previously opened an investigation into whether GM reacted swiftly enough in its recall.

Also on Tuesday, Reuters reported that a U.S. Senate committee chairman is seeking a hearing on the issue. The U.S. House Energy and Commerce Committee also ordered GM and NHTSA to turn over information about GM's ignition-switch problems.

GM declined to comment on news of the criminal probe, but has said it is cooperating with regulators and Congress in their probes.

The automaker is also conducting an internal investigation into the matter.

GM faces a fine of up to $35 million from NHTSA, and several analysts have estimated the recall could cost the company $70 million to $280 million.

The automaker has not disclosed what the recall will cost.

Analysts agreed that the biggest costs could come from lawsuits likely to result from the recall and probe.

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