Obama’s Task Force on the Auto Industry Flunks the Test.

by Jim Geraghty

Also in today’s Jolt, hitting e-mailboxes a moment ago, a bit more about the General Motors recall scandal. A question that must be answered: How did President Obama’s Task Force on the Auto Industry, which put together the GM bailout, manage to miss the fact that the company had a “potentially fatal defect [that] existed in hundreds of thousands” of GM vehicles, with massive liability issues?

Announcing his Task Force’s plan, President Obama said, “We, as a nation, cannot afford to shirk responsibility any longer. Now is the time to confront our problems head-on and do what’s necessary to solve them.” But we now know GM wasn’t confronting problems head-on and doing what was necessary to solve them; they let the defective and dangerous cars remain on the roads for years. And either they hid that, as they asked the government for billions of dollars in aid from taxpayers . . . or, even worse, it was mentioned, and the Task Force never told the public.

From BusinessWeek:

GM’s own engineers, along with newspaper auto writers, were talking about the ignition switch defect in several GM models almost a decade before the carmaker announced plans last month to recall 1.6 million vehicles . . . 

The documents GM filed yesterday indicate the company got an early indication of the ignition-switch problems as it developed the Saturn Ion in 2001. It thought the problem was fixed. Then, in 2003, an engineer investigating a consumer complaint was able to replicate engine stalls while driving. GM ended up using the same switch in the Cobalt, the G5 and three other U.S. models.

Wait, did we say that they knew about this sudden-stall problem for a decade? Maybe two decades, according to Automotive News:

Stung by rising warranty costs, General Motors decided in the mid-1990s to pull design work for ignition and turn-signal switches from suppliers and put its own employees in charge. One of the first projects for the in-house team was the ignition switch for the Saturn Ion and Chevrolet Cobalt.

Why did GM authorize a redesign of the part in 2006, eight years before the recall? And why was the change made so discreetly — without a new part number — that employees investigating complaints of Ions and Cobalts stalling didn’t know about it until late last year? . . . 

Not assigning the new part number would have been highly unusual, according to three people who worked as high-level GM engineers at the time. None of the engineers was involved in the handling of the ignition switch; all asked that their names not be used because of the sensitivity of the matter.

“Changing the fit, form or function of a part without making a part number change is a cardinal sin,” said one of the engineers. “It would have been an extraordinary violation of internal processes.”

That doesn’t prove that the company was trying to cover up a defective, dangerous part . . . but it sure does look suspicious.

Why does this matter to us? Because $10.5 billion of our tax dollars were given to GM to steward them through the bankruptcy — and it’s very likely they were lying to everyone the whole time. The National Legal and Policy Center is asking some very tough questions:

The timing of the revelation (May 15, 2009, just two weeks prior to GM filing for bankruptcy) that a “potentially fatal defect existed in hundreds of thousands” of GM vehicles is of particular importance as the company is currently being accused of hiding the liabilities arising from the defects from the bankruptcy court in June of 2009. Is it really believable that the company honestly overlooked a “potentially fatal defect” and the accompanying lawsuits when they were required to disclose them to the bankruptcy court? Also, how could President Obama’s Auto Task Force, which orchestrated the bankruptcy process, not know of the issues when they were so deeply entrenched at GM.

If Old GM knew about the defects, New GM had to know as well. Also, meetings were held in July of 2011 regarding the known defects at a time when Mary Barra was head of product development; still, no recall. And New GM’s recent responses have not been any better than the old.

All through the reelection campaign, Barack Obama and his supporters celebrated the GM bailout as one of his shining successes. Now it turns out we were helping a company that sold dangerous, defective vehicles last a little longer until the plaintiffs’ lawyers got a hold of them. (The argument is that by hiding the danger during the bankruptcy crisis, the “new GM” is liable for the actions of the “old GM.”)

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