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Tags: GM

GM Hits 16 Million Recalled Vehicles for the Year



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You may recall complaints about GM, and the wisdom of the government bailouts in light of the revelations that company engineers covered up a potentially fatal defect in millions of cars, here and here and here and here and here. And lots of other places.

GM’s throwing another massive recall on the pile:

General Motors on Monday recalled more than 3 million U.S. cars for faulty ignitions. The cars range in model years from 2000 to 2014.

From January 1 to May 28, GM issued recall notices for 13.79 million vehicles. For perspective, GM sold 2.6 million vehicles in 2012.

Zero Hedge calculates the total number of recalls in 2014 at 19 million. The AP calculates 17.7 million.

The recall includes models that were among the top sellers under the “Cash for Clunkers” program. President Obama, speaking at a GM plant in Lordstown, Ohio, September 15, 2009:

“That program was good for automakers, consumers, and our environment,” Obama said of the Cash for Clunkers programs, “and the Chevy Cobalt that you build here was one of GM’s most sought-after cars under that program. Dealers across the country started running out of it and needed you to build more.”

Like this most recent batch of recalled cars, all Chevy Cobalts from 2005 to 2010 are being recalled because of fears the

ignition switch may move out of the “run” position, resulting in a partial loss of electrical power and turning off the engine. This risk increases if your key ring is carrying added weight . . . or your vehicle experiences rough road conditions or other jarring or impact related events. If the ignition switch is not in the run position, the air bags may not deploy if the vehicle is involved in a crash, increasing the risk of injury or fatality.

ABOVE: President Obama, boasting about the popularity of the Chevy
Cobalt under the “Cash for Clunkers” program, September 15, 2009.

Tags: GM

Oh Good, Another Government Deal With GM.



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The federal government reached an agreement with General Motors. Well, another one.

Hey, how about the “significant fine” being roughly $10.5 billion, since that’s the amount taxpayers lost on GM stock, since they’re the ones that saved this company that sold defective cars for years and covered it up?

Looks like it will be a smaller sum:

UPDATE: Zero Hedge summarizes it well:

Tags: GM

Taxpayer-Saved Automaker Asks Court to Bar Lawsuits Over Defective Switches



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Aren’t we all glad that U.S. taxpayers lost $10.5 billion saving this company?

General Motors Co filed a motion in a U.S. bankruptcy court to enforce a bar on lawsuits related to ignition defects in cars sold before its 2009 bankruptcy as it fights a class action lawsuit that seeks to set aside the restriction.

The argument of General Motors is that legally, they’re the “new G.M.,” freed from the liabilities of the “old G.M.” The plaintiffs will argue that the usual bankruptcy liability protections are null and void if a company withholds key information during the bankruptcy process — i.e., the fact that they’ve made millions of cars with a potentially lethal defect.

The taxpayer bailout is being cited by the plaintiffs as a supporting argument for letting the lawsuits proceed:

GM’s argument suggests that the U.S. Government would have agreed to extend $40 billion of taxpayer money for GM’s restructuring, and supported shielding it from liability through the sale order, had it known of GM’s intentional misconduct.

(Well . . . if the whole purpose of the bailout was to help the administration’s allies in the United Auto Workers, can we really be sure that it wouldn’t?)

This morning, President Obama’s “auto czar,” Steve Rattner, who ran the bailout, was on MSNBC’s Morning Joe . . . talking about income inequality, not GM.

Tags: GM , Obama Administration

Callous ‘old GM’? Cobalt was recalled multiple times



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In November, 2004, General Motors recalled 2005 model year Chevy Cobalts for faulty headlamps that could cause “additional glare, increasing the risk of crash” to oncoming drivers. In January, 2007, GM recalled more Cobalts to install energy-absorbing plastic in the headliner trim “to reduce the severity of head impacts in a crash.” And in March, 2010, GM again recalled Cobalts to replace crabby power steering motors that would fail “requiring greater driver effort (and) increasing the risk of a crash.”

So much for claims by politicians and their media chorus last week that the late Chevy Cobalt was Exhibit A of an “old GM” that put the bottom line above customer safety.

In fact the multiple GM recalls prove that Swtichgate — the latest, February, 2014 recall of Cobalts (and its sister Saturns and Pontiacs) for faulty ignition switches tied to 13 deaths –– is an anomaly in an industry that relentlessly tracks vehicle faults and recalls them in a timely manner. Last year, more vehicles were recalled than were sold — and this year the industry is on track to recall more vehicles than the record-setting year (30 million) of 2004. Such is the automakers’ obsession with satisfying customers in an intensely competitive market.

The truth is that last week’s Switchgate hearings were evidence not of a failed auto-industry culture but a sick Washington culture where trial-lawyer-funded pols grandstand before cameras about products they don’t understand, while witnesses clam up for fear of criminal gotcha probes by circling U.S. attorneys.

“You don’t know anything about anything,” snapped Sen. Barbara Boxer, (D., Calif.), as GM CEO Mary Barra tip-toed through her testimony. Boxer was one of two women — Sen. Claire McCaskill, (D., Mo.) was the other — who led the Barra witch-hunt in part because they could grill the first female auto CEO without looking like bullies.

But the other part is that Boxer and McCaskill are stooges of the trial-lawyer industry — an industry that stands to make millions from Switchgate lawsuits.

Both senators are on the Top Ten list of trial-lawyer campaign contributions, according to OpenSecrets.org. In the last six years of available data, McCaskill was No. 2 (behind only Harry Reid) with $374,000 in tort lawyer contributions, while Boxer was No. 10 with nearly $200,000.

They are also among those legislators who have endorsed higher fuel-economy mandates (so-called CAFE laws) — even as the National Academy of Sciences found that CAFE standards cause 1,300 to 2,600 traffic deaths every year (a number that dwarfs Switchgate fatalities) by forcing manufacturers to build smaller and lighter cars.

This is not to excuse GM’s slow response to a ten-year-old defect. But the evidence points not to a corporate conspiracy but to product engineers who failed to classify the switch as a safety defect or who covered up the flaw with a circa-2007 fix that didn’t include a corresponding change in part number.

Such issues will be resolved by an internal GM investigation — and in court. In the meantime, Barra was dragged to Capitol Hill fully aware that any uninformed statement could be twisted into a criminal prosecution. Only last month, Toyota was fined $1.2 billion by the Justice Department. Toyota’s crime? Its Congressional testimony didn’t comport with internal documents expressing concerns about sticky gas pedals — even though NHTSA ultimately concluded sticky gas pedals were not a safety problem.

Saturday Night Live had a field day with Barra’s scripted answers. But Barra and her lawyers were guided by the Toyota precedent. Such is the farce of Congressional “fact-finding” hearings.

Barra even played along with the “Old GM-new GM” ruse in order to simplify the narrative. “We had more of a cost culture,” she said stressing that GM was “changing to a customer culture that focuses on safety and quality.” The media ate it up even as the evidence of the Cobalt’s three prior recalls shows the company has always been concerned about safety.

Quality? Well, according to JD Power, that’s where GM has some catching up to do.

Tags: Chevy Cobalt , McCaskill , GM

Auto Industry Task Force: Nobody Told Us About Those Switches!



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Bloomberg BusinessWeek sheds a little more light on what President Obama’s Auto Industry Task Force knew about the faulty switches . . . at least according to unnamed sources:

The task force President Barack Obama set up to manage General Motors Co. (GM)’s bailout and bankruptcy in 2009 wasn’t aware of the faulty ignition switches linked to 13 deaths in small cars, said people familiar with the matter.

Had it come up, the task force would have considered setting aside more money for the GM estate left behind after the Detroit-based automaker filed for bankruptcy in June 2009, said the people, who asked not to be named because their meetings were confidential. At the time, GM’s board and the task force based their projections for product-liability claims on a report that the GM estate would face about $414 million for pre-bankruptcy crashes, according to court papers.

While members of the task force met frequently in early 2009 with GM executives to discuss product-liability claims and determine how they should be handled in bankruptcy, the ignition switches or safety problems with the Chevrolet Cobalt weren’t brought up, said the people.

The administration’s line was always likely to be, “Hey, they never told us about the faulty switches!” Of course, the job of the Auto Industry Task Force was to get an accurate understanding of the condition of GM, not just to take GM management’s word for it. Clearly some folks at GM knew about these faulty switches and the safety and liability issues they presented; they chose to not tell the Task Force. Or the public. Did anyone on the task force ever raise the question of whether GM was accurately representing the risk of product-liability claims? Did the task force talk to anyone in the engineering department? Or was the bailout thrown together as quick as possible in order to save the jobs of administration’s ally, the United Auto Workers?

Also note this:

Steven Rattner, who headed the task force for the Obama administration, declined to comment on the matter when reached by phone Wednesday.

Up until recently, Rattner was eager to tout the success of the GM bailout. Now he has nothing to say.

Even contributors to the Huffington Post are noticing that it’s a lot harder to tout the GM bailout as a success or good policy after these revelations:

What kind of company did the government save? One that waited a decade to recall millions of cars with a lethal defect that would shut down engines without warning. One that chose not to replace the defective part, an ignition switch, when it was first detected. It would have cost less than $1 a car to do so.

Tags: GM , Steve Rattner , Barack Obama

Government Motors Champions Turn on General Motors



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Democrats have the Government Motors bailout to thank for their party’s White House and Senate victories in 2012, as Detroit auto company rescues were crucial to holding swing manufacturing states like Ohio and Michigan.

But now that the federal government has exited GM, Democrats and their media cheerleaders are throwing the company under the bus as part of their 2014 War on Business campaign.

Appearing before a Senate Committee Wednesday investigating GM’s recall of 2.6 million vehicles over a faulty ignition switch linked to 13 deaths, GM CEO Mary Barra was harangued as a corporate murderer. Yes, the same Mary Barra who was President Obama’s State of the Union guest. The first female auto CEO! More evidence of why Democrats saved America’s jewel! As NRO’s Jim Geraghty notes in his must-read reporting on this issue, President Obama and his Auto Czar Steve Rattner are suddenly mute on their bailout triumph.

“Look at what happened to General Motors. We saved Made-in-America for domestic auto production. We saved thousands of jobs,” said Senator Claire McCaskill (D., Mo.), in 2010 on her way to reelection — re-election aided by contributions from the UAW, which was the focus of the auto bailout. No bailout, no union campaign funds for Democratic pols.

Yet on Wednesday, McCaskill accused  Barra of a “culture of cover-up” because “she would not talk about specifics at any of these hearings.”

That’s rich.

McCaskill media sympathizers covered up White House intimidation of secured bondholders during the auto bailout. They ignored White House favoritism towards Delphi retirees over white-collar retirees. And they don’t want to talk about the specifics of the curious timing of the feds’ selling their last GM shares in December — just weeks before the company declared its Switchgate liabilities.

“Insider trading?” asks NRO reporter Greg Pollowitz.

Democrats are unconcerned. As they have been of the daily casualties resulting from Obamacare’s stripping of millions of Americans of their insurance. What’s more, Democrats like Michigan Senate candidate Gary Peters (another UAW bailout beneficiary also mute on the Switchgate issue) have attacked cancer patients who have dared complain of their shoddy Obamacare treatment. Imagine if GM were to smear the casualties of Switchgate as drunks and liars.

Sadly, in today’s highly partisan Democrat and media circles, all that matters is defending Obama’s legacy. Any bad news that happened during government ownership of GM? What government ownership?

Tags: GM , Switchgate , Barra

Put Out a BOLO for Steve Rattner



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This Detroit News column by Frank Beckmann . . . 

Instead of grilling Barra, Congress should be calling her predecessors — Rick Wagoner, Fritz Henderson, Ed Whitaker and Dan Akerson — to find out what they knew or why they didn’t take action.

And while they’re at it, they can bring in Steven Rattner, the former Obama auto czar, an “all hat-no cattle” overseer who claimed to know everything about the restructuring of GM through its bankruptcy.

. . . is the only reference to Obama “Car Czar” Steve Rattner in any news publication in the month of April, outside of this blog and others quoting this blog, at least according to a Google News search.

For what it’s worth, Charlie LeDuff, correspondent for the local Fox affiliate in Detroit, had a spectacular confrontation with Representative Henry Waxman, who chaired the House Committee on Oversight and Government Reform during the bailout of GM. Waxman storms away from the correspondent after LeDuff rather angrily asks Waxman why he and his committee, allegedly watching over the bailout process, didn’t know about the danger from the faulty switches. Some argue that the confrontation generates more heat than light.

Fox 2 News Headlines

Tags: GM , Henry Waxman

Obama, 2009: The Chevy Cobalt Is a
‘Well-Engineered, Safe’ ‘Car of the Future’



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President Obama, speaking at the General Motors Lordstown Assembly Plant in Warren, Ohio, September 15, 2009:

Today, you made, by the way, some more good news: I understand that the one-millionth Cobalt rolled off the assembly line late last night. So I don’t want to just congratulate you, I want to thank you. You’re doing your part to move us forward and make sure that the high-quality, well-engineered, safe and fuel-efficient cars of the future will be built where they’ve always have been built — right here in Ohio, right across the Midwest, right here in the United States of America.

All Chevy Cobalts produced between 2005 and 2010 are being recalled.

ABOVE: President Obama, saluting the Chevy Cobalt as
one of the “high-quality, well-engineered, safe and
fuel-efficient cars of the future,” September 15, 2009.

At the time of Obama’s speech at the GM plant, saluting the Cobalt, GM engineers knew the cars were unsafe, according to the New York Times:

Any doubts were laid to rest among engineers at General Motors about a dangerous and faulty ignition switch. At a meeting on May 15, 2009, they learned that data in the black boxes of Chevrolet Cobalts confirmed a potentially fatal defect existed in hundreds of thousands of cars.

Tags: Barack Obama , GM

McCaskill Tries to Turn the GM Scandal Into a Government-Spending Issue



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From the Thursday edition of the Morning Jolt:

McCaskill Tries to Turn the GM Scandal Into a Government-Spending Issue

MSNBC’s Chuck Todd interviewed Senator Claire McCaskill (D., Mo.) yesterday, and she offered a revealing moment. Todd asked whether the government, in particular the National Highway Traffic Safety Administration, had some culpability for the failure to inform the public about the faulty switches earlier.

The evidence is compelling:

A senior NHTSA investigator in September 2007 asked his superiors to open a formal investigation into Cobalt cars for stalling after reports of four fatal crashes but his superiors opted against it. Friedman said the Cobalt only had a slightly elevated risk. In early 2008, one of the special crash reports was completed that showed a link between the key position and the failure of the air bag to deploy.

The agency has just 51 people in its defect investigations unit with a $10.1 million budget — a fraction of the agency’s $800 million. The White House has asked for a small increase in the agency’s defects budget to $10.6 million.

McCaskill told Todd the problem is that we’re not spending enough money. She lamented “Ten million dollars to keep up with the engineering challenges of the modern auto industry? That’s ridiculous! Most of the time around this building, everyone’s trying to cut government.” She repeated the claim in the hearing Wednesday.

Sen. Claire McCaskill, D-Mo., who chaired the hearing on Wednesday, noted that NHTSA’s defect budget — which only funds about 51 people — has remained flat for about a decade. “Do you believe that $10 million is adequate to spend in this country for defects investigation for the entire automobile industry,” McCaskill said. “We need to have the resources and the expertise at NHTSA to find these defects.”

Is there nothing in that existing $800 million NHTSA budget that can be deemed extraneous or unnecessary, with the funds diverted to this? And how, exactly, would more money make the superiors listen to those engineers? The problem here is one of judgment, not funding.

But the Progressive always has an excuse for government failure; we’re not spending enough money. Never mind that this country dramatically increased its spending on public education with no corresponding improvement in student academic achievement. Never mind that Oregon spent more than $200 million on a health-insurance exchange, with nothing to show for it (the exchange doesn’t work), and Maryland spent $125 million, with nothing to show for it (the exchange is so dysfunctional they’re scrapping it and building a new one).

That same Claire McCaskill, back in late November 2008:

Sen. Claire McCaskill, a Democrat, said she’s willing to consider an auto bailout, but not before she Congress gets a clear accounting of the companies’ financial situation.

“We need to behave like a bank,” McCaskill said. “And we need to make sure that we get all of those internal financials and that we feel comfortable that this is a good investment for the American taxpayer.”

Clearly, the financials the U.S. government received either didn’t mention the potential liability issue from these switches, or the government didn’t ask, or it didn’t look too hard. After all, the jobs of unionized auto industry employees were at stake.

That same SenatorClaire McCaskill back in 2010: “Look what’s happened at General Motors. We saved ‘made in America’ for domestic auto production. We saved thousands of jobs, we saved entire communities, because of what we did for General Motors.”

So Democrats find themselves insisting, simultaneously, that losing $10.5 billion in bailing out General Motors was absolutely the right thing to do, because GM is a good company full of good people making good cars, and at the same time this is an abominable outrage, because this is a reckless, selfish company full of irresponsible people making cars that kill people if the key chain is too heavy.

Yesterday McCaskill was denouncing GM’s “culture of a cover up” one moment and then telling GM CEO Mary Barra, “You have a great company and an enormous responsibility to get this right.”

How many “great companies” have “cultures of cover-up”?

Tags: Claire McCaskill , GM , Barack Obama

Anyone Seen the Guy Who Gave GM $49 Billion in Taxpayer Money?



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Also in today’s Jolt:

Has Anyone Seen The Guy Who Gave GM $49 Billion in Taxpayer Money?

Remember Steve Rattner? From his own biography: “Rattner served as Counselor to the Secretary of the Treasury and led the Obama Administration’s successful effort to restructure the automobile industry, which he chronicled in his book, Overhaul: An Insider’s Account of the Obama Administration’s Emergency Rescue of the Auto Industry.” You know, the car czar.

Over on his personal website, his most recent article is on challenges to Europe’s economies. He wrote it March 21.

Over on his blog, the most recent entry is from March 17, on the missing Malaysian jet.

Rattner was on ABC News This Week Sunday, but he talked about manufacturing wages, not GM’s problems or the bailout. ABC News did a separate interview with him, asking him how he felt about the “car czar” nickname, but not about GM.

A Google News search reveals Rattner has gone largely unmentioned in the coverage of the GM defective-switch scandal. He’s not saying much on his own venues, and apparently no one wants to ask him any questions about President’s Auto Industry Task Force, just how thorough their review of GM was, and how they managed to miss so many consequential lurking safety issues.

Allow me to spotlight two sentences in Michael Moore’s rant about the GM defective-switch scandal that indicate the mental leap our progressive friends have to make when discussing this story:

Only now, under the newly-configured GM — owned, essentially, by you and me from 2009 through last year — has the truth come out . . . 

I hope someone in the Obama administration will get out the handcuffs, the SWAT teams, or the U.S. army if need be, march into GM headquarters in downtown Detroit and haul away anyone who is there who had anything to do with this. And if they already left town, hunt them down and bring them in to face justice.

“Anyone who had anything to do with this”? Would that include “the owners from 2009 through last year”?

The GM bailout put big government and a big corporation in bed together; now Moore only wants to blame one spouse. To give him a smidgen of credit, he was sufficiently distrustful of GM that he wasn’t cheerleading President Obama’s bailout back in 2009: “Who among us wants $50 billion of our tax dollars thrown down the rat hole of still trying to save GM?” Of course, Moore wanted President Obama to “immediately convert our auto factories to factories that build mass transit vehicles and alternative energy devices” because “things we call ‘cars’ may have been fun to drive, but they are like a million daggers into the heart of Mother Nature. To continue to build them would only lead to the ruin of our species and much of the planet.” I guess he walks everywhere. (Friendly reminder: Michael Moore has a $2 million, 10,000-square-foot mansion in Torch Lake, Michigan, that he must somehow heat and cool without any carbon emissions.)

There is plenty of blame to go around here. First there’s the serious accusation that GM hid just how deadly the problem could be:

In particular is the charge from a National Highway Traffic Safety Administration (NHTSA) official that the agency had no knowledge in the link between faulty ignition switches and airbag non-deployments. “GM had critical information that would have helped identify this defect,” said David Friedman.

Then there’s the charge that federal safety inspectors and regulators are now blaming GM to divert attention from their own bureaucratic inertia . . . 

However, former NHTSA administrator Joan Claybrook took her former employer to task yesterday, saying, “NHTSA has fallen into a bureaucratic quagmire that it uses to avoid opening investigations and determining safety defects while people are dying unnecessarily on the highway. . . . It is past time for NHTSA to put the public first in its safety defect decisions.” The NHTSA has been faulted for not fully looking into the issue, as they concluded in 2007 that there wasn’t enough evidence to press for an investigation.

Says Friedman, “We believe our defects investigation program and recalls process has functioned extremely well over the years in identifying defects that create unreasonable risks and ensuring that recalls occur whenever appropriate. Even so, we continually seek ways to improve.”

Remember, this administration tied itself at the hip to General Motors’ leadership. Not many CEOs get invited to the State of the Union.

Tags: GM , President Obama , Steve Rattner

Which Embattled CEO Was Michelle Obama’s Guest for the State of the Union This Year?



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From the Wednesday Morning Jolt:

Guess Which Embattled CEO Was Invited to the State of the Union This Year?

From this year’s State of the Union Address: “Our success should depend not on accident of birth, but the strength of our work ethic and the scope of our dreams. That’s what drew our forebears here. It’s how the daughter of a factory worker is CEO of America’s largest automaker.” That line referred to General Motors CEO Mary Barra, invited by Michelle Obama to the address and sitting near the First Lady.

Barra, top right; Michelle Obama, bottom left.

The news Tuesday:

General Motors chief executive Mary T. Barra on Tuesday deflected a barrage of questions on Capitol Hill about the automaker’s failure to fix a deadly ignition-switch flaw, telling lawmakers that she was unaware of the decade-old problem until early this year.

How early? Before or after she was the First Lady’s guest of the State of the Union?

While she repeatedly apologized for a defect that GM has blamed for the deaths of at least 13 motorists, Barra also repeatedly ducked lawmakers’ sometimes testy queries, saying she is awaiting the results of an internal investigation.

At one point in the hearing, Barra admitted she had not read all the documents submitted by GM to the committee. As Reuters television put it, “many times the head of GM pleaded ignorance to the details behind several GM recalls.”

Finally, “Barra, however, stopped short of promising to reveal the company’s entire internal report, instead saying she would release what GM considered ‘appropriate.’”

Tags: GM , Michelle Obama

Democratic Senator Tells GM Car Owners to Stop Driving Immediately



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A reader sends this in and quips, “Blumenthal to Michigan: Drop Dead!”


CBS Connecticut:

Connecticut Senator Richard Blumenthal is among those calling for GM to make a stronger statement and tell owners to stop driving their cars immediately. Blumenthal believes GM made a decision to hide the defect of ignition switches.

Considering the risk from the switches, Blumenthal’s advice isn’t the most outlandish conclusion in the world. If an owner of one of the recalled cars wants to drive it at all, he should remove everything from the key chain and drive the car to the dealer, very carefully, over the smoothest roads possible, and get the car checked out.

The problem is that we’ve been told for five years that General Motors was a national institution that had to be saved at all costs, including billions of taxpayer dollars. Now Democratic lawmakers are really, really eager to drop the hammer on GM for hiding the danger these cars presented to the public. That may be (and increasingly appears to be) completely justified, except the same crowd told us five years ago that all of us had to chip in to save this company, so they could keep making these cars that Blumenthal wants everyone to stop driving.

UPDATE: Fantastic. Vin Flynn notices that back in 2010, Blumenthal touted his help for General Motors in his campaign ads:

Tags: GM , Richard Blumenthal

Remember When Obama Touted the Now-Recalled Chevy Cobalt?



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President Obama, speaking at a GM plant in Lordstown, Ohio, September 15, 2009:

“That program was good for automakers, consumers, and our environment,” Obama said of the Cash for Clunkers programs, “and the Chevy Cobalt that you build here was one of GM’s most sought-after cars under that program. Dealers across the country started running out of it and needed you to build more.”

All Chevy Cobalts from 2005 to 2010 are being recalled because of fears the

ignition switch may move out of the “run” position, resulting in a partial loss of electrical power and turning off the engine. This risk increases if your key ring is carrying added weight . . . or your vehicle experiences rough road conditions or other jarring or impact related events. If the ignition switch is not in the run position, the air bags may not deploy if the vehicle is involved in a crash, increasing the risk of injury or fatality.

ABOVE: President Obama, boasting about the popularity of the Chevy
Cobalts under the “Cash for Clunkers” program, September 15, 2009.

Tags: Barack Obama , GM , Cash for Clunkers

Total Recall: GM’s Chance for Rebirth



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Before the House Energy and Commerce Committee Tuesday, the CEO of America’s biggest auto company will apologize for her company’s negligence in pursuing a defective part that has been linked to the loss of 13 lives.  

“As soon as l learned about the problem, we acted without hesitation. Whatever mistakes were made in the past, we will not shirk from our responsibilities now and in the future,” Barra will say of the recall of 2.5 million vehicles with potentially faulty ignition switches, according to a copy of her written testimony released Monday. “That begins with my sincere apologies to everyone who has been affected by this recall. My management team and I . . . will hold ourselves fully accountable.”

Barra’a contrition is a jarring contrast to President Obama’s arrogant defense of his disastrous Affordable Care Act. America’s CEO lied about his product and has refused to recall it even as millions (including cancer patients) have suffered from the loss of their insurance and doctors. Calling for a full investigation by a U.S. attorney, Barra promises “we will be fully transparent with you, with our regulators, and with our customers.” Obama refuses anything of the sort. Such are the expectations of our political leaders vs. our business leaders.

For all GM’s troubles, “Switchgate” — named for the faulty ignition switch that can inadvertently stall cars made between 2005–2011 — could ultimately benefit Barra and her company.

As the first female CEO of an American automaker, Barra will benefit from enormous political  goodwill. She is assisted by the fact that none of the cars effected are still in production. They are relics of an old GM — a pre-bankruptcy GM that was burdened by excessive labor costs, pension overhead, and poorly designed sedan products.

With the massive recall, Barra can help sever Old GM from New GM, putting in place safety systems (she has already announced a new veep for Global Vehicle Safety) that will assure that Switchgate won’t be repeated. Indeed, the ignition snafu is an anomaly in a company — and an industry — that is quick to recall unsafe products. For example, the 2005 Chrysler Pacifica – of similar vintage to Switchgate star, the Chevy Cobalt — also had a mysterious stalling problem. It was recalled within two years of launch.

Conspiracies will abound. Did GM bury Swtichgate because of pressure to keep a new vehicle launch on schedule? Did Chevy resist the recall expense because the company was in increasing financial straits?

Perhaps.

But GM insiders say there likely is no smoking gun — that the Cobalt’s (and Pontiac Solstice, and Chevy HHR, etc.) ignition was considered by engineers to be a mechanical issue that never rose to the level of safety defect (thus, its part number was never changed even after the ignition was fixed sometime around 2007).

The deaths associated with the ignition had muddying factors — drivers were alcohol-impaired or youngsters driving in wet conditions — preventing easy connection of the dots. By the time the ignition was definitively linked to air-bag deployment — circa 2009 – the part had been repaired.

Critics — my NRO colleague Jim Geraghty among them — will rightly question whether Switchgate was further buried by a government-run bankruptcy (would NHTSA embarrass its own White House with a recall?). Fair enough. But the White House Auto Task Force was uninterested in liability — only in quickly restructuring the company’s balance sheet so that the UAW could survive and continue to feed the Democratic Party campaign cash. It was a UAW bailout, not an auto bailout.

In crisis there is opportunity, and GM has a chance to redeem itself under the hot glare of public attention. With the best products it has ever produced in showrooms now (new Corvette, new Malibu, new Tahoe, new Caddies, etc.), a new focus on customer service would do a lot of good.

Tags: GM , Obama , Obamacare , Chevy Cobalt

Kurtz: Where’s the Coverage of Washington’s Role in GM’s Mess?



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Howard Kurtz, now over on Fox News, raises the question about why coverage of GM’s recall has largely ignored the Washington angle:

. . . The federal government is complicit is more ways than one.

GM, you’ll recall, had to be rescued by the taxpayers in 2009, and the federal stake was so large that the company was dubbed Government Motors when it went through bankruptcy. But bankruptcy rules require a disclosure of all liabilities as well as assets. By hiding the defect in its cars, GM may have committed bankruptcy fraud.

Beyond that, the utter failure of the National Highway Transportation Safety Agency to crack down on the defective ignition switch is an embarrassing failure. But regulatory agencies are a journalistic backwater, drawing a fraction of the coverage lavished on the White House, Congress and politics.

Allow me to submit another motive in the media’s disinterest: The massive GM recalls — now more than 6 million vehicles — would require the media to revise a major storyline from a few years ago — the near-collapse, bailout, and resurrection of General Motors, which has largely been covered as an unvarnished success story for the Obama administration. He writes, “You can’t single out President Obama because the government’s failure to act stretches back to the Bush administration, so it doesn’t make for a left/right slugfest.” That’s true enough as it goes, but the Obama administration somehow missed these multiple massive safety issues while putting together the bailout, which ultimately poured $49 billion into GM, and cost taxpayers $10.5 billion once the last share of stock was sold. Hammer the NHTSA, but at what point does the President’s Auto Industry Task Force look negligent? How did they miss so many consequential lurking safety issues in what was allegedly a thorough review of the company?

In another example of the phenomenon discussed in this piece, a wide variety of voices who are quick to lambaste “corporate greed” and “evil businessmen” — be it Wall Street, Big Oil, Big Tobacco, health-insurance companies, or any one of many others — are strangely quiet about a car company that manufactured and sold cars with a fatal defect. Why? Because progressives don’t begin from the principle, “a company must make safe products to be a good company.” They begin with “Barack Obama is the good guy.” Barack Obama supported and enacted the bailout of GM, thus that bailout must be a good thing. Thus, GM must be a company worth helping. Acknowledging that GM made dangerous cars, lied about it to the public, and then had the audacity to ask the taxpayers for money while keeping the danger of the cars secret would disrupt the “GM is worth helping, and Obama was right to help them” narrative, so it must be ignored, shoved aside, eyes averted, and so on.

UPDATE: Finally, over in the Guardian of the U.K., some tough coverage of Washington’s role in this, from economics columnist Heidi Moore:

Four years later, in December 2013, GM seemed to justify the cost — and faith — of its bailout. When the US Treasury sold its remaining stake, President Obama wrapped the moment in misty-eyed rhetoric about national pride:

When things looked darkest for our most iconic industry, we bet on what was true: the ingenuity and resilience of the proud, hardworking men and women who make this country strong. Today, that bet has paid off. The American auto industry is back.

We were desperate to believe this.

Less than four months later, it seems foolish that any of GM’s fairy tale was believable to anyone. After the recalls and the estimates of driver deaths, all of that talk — of the reborn American automaker, of bets paid and dollars won — seems like a hollow spectacle.

And it has to make us wonder: how much were US taxpayers and the government complicit in sustaining a company that researchers had already suggested was unable to compete in the modern automotive industry?

“It’s no ‘new GM’ if they’re doing this,” Dartmouth Tuck School of Business professor Paul A Argenti tells me. “If this has been hidden for 10 years, there’s nothing new about the company. It’s old-school GM. It’s stuff you can’t even imagine a company could do in the 21st century.”

Tags: GM , Barack Obama

After $10.5 Billion Bailout, GM Recalling Nearly 5 Million Cars



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You know that auto company that taxpayers spent $10.5 billion to save? They’re recalling 4.8 million vehicles as potentially fatally defective.

The expanding recall order from General Motors is being treated as a Detroit story, not a Washington story. But evidence is mounting that federal safety regulators made critical decisions that kept the defective cars on the roads:

Seven years ago, a National Highway Traffic Safety Administration manager recommended investigating the reason for the non-deploying airbags in General Motors’ 2003-2006 Chevrolet Cobalt and Saturn Ion cars. This was revealed in a memo issued by the House Energy and Commerce Committee. The chief of NHTSA’s Defects Assessment Division e-mailed other officials in the Office of Defects Investigation in September 2007, saying owner complaints from 2005 and “early warning” data about warranty repairs and injuries justified an investigation. According to an interview between current NHTSA officials and the House committee’s staff, the agency reconsidered after reviewing the data thus deciding not to open a formal investigation.

The officials at Delphi Automotive, the supplier of the ignition switches to the recalled GM cars, told congressional investigators that GM approved the original part in 2002. The approval was despite the fact it did not meet GM specifications. As early as 2001, GM was aware of the ignition switch problems, but no recalls were ordered until earlier this year.

This weekend, ABC News interviewed Steve Rattner, lead adviser to President Obama’s Auto Industry Task Force, and asked him how he felt about being called a “czar” . . . but nothing about the GM recall.

Let’s presume that GM never told President Obama’s Auto Industry Task Force about the safety issue of the switches and the massive liability issue it presented. Did anyone on President Obama’s Auto Industry Task Force ever check with the National Highway Traffic Safety Administration? Did anyone on the Task Force even examine whether GM had any safety issues before going ahead with the bailout, which ultimately used $49 billion in taxpayer dollars?

Does anyone in Washington care?

Tags: GM

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



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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.”)

Tags: Barack Obama , GM

The Taxpayer Bailout of GM, Helping Them Sell Unsafe Cars



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President Obama, December 2013:

In exchange for rescuing and retooling GM and Chrysler with taxpayer dollars, we demanded responsibility and results.

The news he alluded to, but did not directly mention that day:

The taxpayer loss on the GM bailout is $10.5 billion. The Treasury department said it recovered $39 billion from selling its GM stake, and had put $49.5 billion of taxpayer money directly into the GM bailout.

The news today:

It was nearly five years ago that any doubts were laid to rest among engineers at General Motors about a dangerous and faulty ignition switch. At a meeting on May 15, 2009, they learned that data in the black boxes of Chevrolet Cobalts confirmed a potentially fatal defect existed in hundreds of thousands of cars.

But in the months and years that followed, as a trove of internal documents and studies mounted, G.M. told the families of accident victims and other customers that it did not have enough evidence of any defect in their cars, interviews, letters and legal documents show. Last month, G.M. recalled 1.6 million Cobalts and other small cars, saying that if the switch was bumped or weighed down it could shut off the engine’s power and disable air bags.

The Times reports:

Since the engineers’ meeting in May 2009, at least 23 fatal crashes have involved the recalled models, resulting in 26 deaths.

In November 2008, automaker executives came to Washington and “pleaded for emergency government aid.” At the end of May 2009 — after that meeting about the potentially fatal defect in the Cobalts! — the Obama administration finalized its aid package and terms to GM, committing “another $30 billion on top of the $19.4 billion it has already given GM to cover its losses and fund its operations, in exchange for a 60% equity stake in the new company after restructuring, as well as $8.8 billion in debt and preferred stock.”

Great news, taxpayers. You spent $10.5 billion to save a company that sold defective, unsafe cars, and lied about it for years.

Note this wrinkle:

When questioned last week at a news conference whether government ownership had any impact on the regulatory response to the ignition switch problems, Attorney General Eric H. Holder Jr. responded: “I’m not sure that is necessarily true.”

Time to update that Obama 2012 slogan. “GM is alive, and 29 Cobalt drivers and passengers are dead.”

ABOVE: President Obama tapes his weekly address from a GM plant in
Detroit, October 14, 2011; there’s no word on whether the car behind him is one
of those with life-threatening defects that GM knew about but did not disclose.

Tags: GM , Bailouts , Barack Obama , Eric Holder

From Aluminum Trucks to Eliminating Coal: The Economic Costs of Obama’s CO2 Edicts



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Why is the U.S. economic recovery struggling? Consider major stories from the Wall Street Journal and New York Times this Wednesday alone.

“General Motors is accelerating efforts to field a largely aluminum-bodied pickup truck by late 2018, under pressure from federal fuel efficiency standards,” reports the Journal.

Under the Obama administration’s unilateral edict that cars and trucks must average 54.5 mpg by 2025, GM will spend billions converting its Chevy and GMC pickups to aluminum bodies — as Ford has done before it with this year’s F150 pickup — in order to save weight and meet the federal standards. Not customer demands, mind you (fuel efficiency is well down the list of truck-buyer priorities). Government demands. Though industry insiders will not confirm an exact number,  replacing steel with  aluminum will add over a thousand dollars in variable costs (costs above standard materials needs) to each pickup, the best-selling vehicles in America.

To put that in context, the Chevy Volt’s plug-in electric/gas drive train adds about $8,000 in variable costs above the standard, gas-engine Chevy Cruze (the model upon which the Volt is based). Manufacturers are all developing money-losing electrics in order to help their fleets meet the 54.5-by-2025 mandate.

Story #2: “President Obama on Tuesday ordered the development of tough new fuel standards for the nation’s fleet of heavy-duty trucks as part of what aides say will be an increasingly muscular and unilateral campaign to tackle climate change,” reports the New York Times.

“Shock and awe may be the best way to describe what’s happening to the vast majority in trucking with these proposed regulations,” said Todd Spencer, executive VP of the the Owner-Operator Independent Drivers Association, in a statement lamenting regulations that the EPA estimates will cost nearly $6,000 a truck. With 97 percent of trucking companies owning 20 trucks or fewer, Obama’s CO2 obsession will do serious harm to small business.

And for what?

“Experts said (the White House’s cumulative global warming edicts) should enable Mr. Obama to meet his target of cutting carbon pollution in the United States by 17 percent from 2005 levels by 2020. But they said he would still be far short of his goal of an 80 percent reduction by 2050,” says the Times.

Yet climate scientists say that 80 percent-by-2050 would be meaningless. Such economy-crippling regulations of 20 percent CO2 reduction per decade for the next four decades – three times the CO2 reduction caused by the Great Recession’s economic slowdown – would only reduce the predicted rise in temperatures by 7 percent.

All pain, no gain. Now add to these restrictions Obama’s diktat to eliminate coal plants and thousands more jobs; raise the minimum wage to $10.10 an hour at a cost of half-a-million jobs by 2016; and Obamacare’s health costs — the number one concern of small business.

In sum, President Obama’s regulations are suffocating American job creation.

Tags: Coal , GM , trucks

On That Janesville Plant, Ryan’s Not Lyin’



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The first skirmish after Paul Ryan’s sterling speech last night involved his example of the GM plant in Janesville, Wisconsin.

Ed Morrissey, Avik Roy, Guy Benson, and Shikha Dalmia are among those examining the offerings of the self-appointed “fact checkers” and finding them either mangling or botching the facts, or accusing Ryan of saying things he did not say.

First, the excerpt:

When he talked about change, many people liked the sound of it, especially in Janesville, where we were about to lose a major factory.

A lot of guys I went to high school with worked at that GM plant. Right there at that plant, candidate Obama said: “I believe that if our government is there to support you. this plant will be here for another hundred years.”

That’s what he said in 2008. Well, as it turned out, that plant didn’t last another year. It is locked up and empty to this day. And that’s how it is in so many towns today, where the recovery that was promised is nowhere in sight.

A lot of liberal bloggers are insisting that the plant was “shut down” under the Bush administration. There’s the point when the orders for new vehicles stopped coming in, and the point when the plant actually completed its orders and stopped making them. One was in the closing months of the Bush administration, the other was in the opening months of the Obama administration: “The Janesville plant stopped production of SUVs in 2008 and was idled in 2009 after it completed production of medium-duty trucks.”

The plants are on “standby,” and some would dispute whether that means the factory is “lost.” But the bottom line is that people aren’t working there (other than whatever skeleton crew is sweeping the floors and maintaining the facility), they aren’t collecting pay, and they are “locked up and empty”: “Since they were shut down in 2009, both the Janesville and Tennessee plants have been on standby status, meaning they were not producing vehicles, but they were not completely shut down.”

Some lefties are jumping up and down and saying, “But Romney and Ryan opposed the GM bailout!” Yes, but that’s not a fact at issue. Ryan doesn’t claim that he and Romney would have, or even get into the bailout.

That section is beautifully constructed because it brings the listener to many conclusions implied but not stated: That the bailout overpromised and underdelivered, that Obama makes promises he can’t keep, and that the government is not to be relied upon to “support you.” The issue is less the GM bailout than the lack of genuine economic recovery. In the Milwaukee Journal-Sentinel story quoted above:

Auto industry observer David Cole, chairman emeritus of the Ann Arbor, Mich.-based Center for Automotive Research, said it would be premature to say the Janesville plant will never reopen.

“If we get back to any kind of a reasonable market, with 15- or 16 million sales, then I think that’s going to require Janesville as well,” he said.

But the economy is recovering more slowly than people anticipated. “That’s really the key factor,” Cole said. “You’re going to see the company be exceedingly cautious on overcapacity. And they obviously didn’t need a commitment for Janesville to get the UAW’s support.”

The problem for the Janesville plant isn’t the GM bailout. The problem is the national economy — the same problem that is preeminent in the minds of most voters this election.

And that’s the biggest problem for the Obama campaign with this entire debate and all of their arguments about precisely when the GM plant stopped making cars. Most voters will tune out the back-and-forth charges until the bottom line: “The plant in Janesville is still closed.”

Tags: GM , Paul Ryan

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