When it rains for General Motors (NYSE: GM), it pours.
A review of federal crash data from an automotive watchdog group found that 303 deaths of drivers and front-seat passengers were caused by airbags that did not deploy in recalled GM vehicles.
The automaker recalled 1.6 million vehicles last month due a defect with ignition switches that is linked to 12 deaths
The review by the Friedman Research Corp., which conducts vehicle design and occupant protection research, was commissioned by the Center for Auto Safety. The search looked at data for 2005-07 Chevrolet Cobalts and 2003-07 Saturn Ions, two of the seven recalled models.
This is not the first examination into the recall. In addition to an inquiry by the National Highway Traffic and Safety Administration (NHTSA), GM is undergoing investigations by both the congressional House Energy and Commerce Committee and the Department of Justice.
“The probe into the GM ignition switch problem is continuing to snowball with questions swirling about how much GM and the National Highway Traffic Safety Administration knew about the issue and when they learned it. Some nine years have elapsed since the initial reports, begging those questions,” said Senior Kelley Blue Book analyst Jack Nerad. “Now, with potential blood in the water, there is a gathering of interested parties to investigate potential regulatory and criminal misconduct.”
At this point, senior KBB analyst Karl Brauer said, the worst-case scenario for GM would be for the government to find the automaker at fault regarding how it handled this recall.
“A component of GM's restructuring a few years ago was to shield it from any prior legal liabilities. So, even if GM is found negligent, this shield will largely, though not completely, mitigate the damages,” he said. “This legal wrinkle makes it difficult to determine how much the government might ask GM to pay in damages.”
But the Detroit automaker needs to come to a quick and satisfying resolution of the issue, Nerad said.
“The fact that GM was rescued by the American taxpayers makes a resolution that is satisfactory to the average person on the street even more imperative than if such an issue arose in another company,” he said.
Who watches the watchmen?
NHTSA, the agency responsible for federal motor vehicle safety standards, is also under fire. In a letter to the agency, CAS said NHTSA's Fatal Analysis Reporting System (FARS) data "clearly" show front-seat occupants were being killed in crashes where airbags did not deploy shortly after the recalled vehicles were introduced. There were three deaths in Ions during 2003 and six in Cobalts during 2005.
“NHTSA could and should have initiated a defect investigation to determine why the airbags were not deploying in Cobalts and Ions in increasing numbers,” the letter says. “As the agency has done in past investigations, special investigation teams should have been sent out to acquire more information on the crashes found in FARS and determine in which ones the airbag did not deploy due to the ignition key defect.”
Brauer said it's interesting that evidence shows NHTSA had prior knowledge of GM's ignition switch problem.
“This means either the evidence wasn't striking enough to indicate a valid concern at the the time, in which case GM has a lot more latitude in failing to act sooner, or it suggests NHTSA's own review processes were ineffective, despite the changes made at the safety agency after the Ford/Firestone recall back in 2000,” he said.
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