GM Suspends Engineers, Adds Recall Repair, Ups Cost To $1.3B

April 10, 2014
General Motors [NYSE: GM] CEO Mary Barra revealed today that it's placed two engineers on paid leave, in connection with the company's massive recall effort, and ongoing investigations regarding whether the automaker knew about the issue—now involving 2.2 million vehicles from the 2003 through 2011 model years—and didn't make a reasonable corrective action many years ago.

And separately, the company specified that it's expanding the recall effort to include replacement of the ignition lock cylinder on some models already included in the switch recall. The added repair will alleviate the possibility that ignition keys could slide completely out while the vehicle is being driven.

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Regarding the lock-cylinder issue solely, GM says that it knows of one rollaway and one injury claim, with no fatalities.

That's not the case for the ignition-switch recall, which already involves numerous injuries and at least 13 fatalities. With that issue, the switch can potentially, through bumping or vehicle vibration, accidentally move from the 'on' or 'run' position into 'accessory' mode. That would cause the engine to turn off unexpectedly, with power steering and braking lost, making it tougher to avoid an accident or safely pull to the side of the road. Furthermore, the airbags would be disabled.

Meanwhile, GM has said that it has sought the services of a NASA team, to consult on whether the affected vehicles are safe to drive.

The two GM engineers placed on leave include Gary Altman, who was the program manager on the Saturn Ion and Chevrolet Cobalt for much of the affected era (and more recently, the chief engineer for the Chevrolet Cruze); and Ray DeGiorgio, the designer of the original switch, which went into production in August 2002 and was first installed in the 2003 Saturn Ion.

GM was first aware of a switch problem in 2001, then in 2004 Altman experienced the ignition-switch problem firsthand.

According to some documents that have been already provided to Congress, Altman might have later tried to reengineer the faulty ignition switch without changing the part number—an unheard-of practice in the auto industry.

GM also announced today that the recall will cost the automaker an estimated $1.3 billion in the first quarter. That's up from an estimated $300 million some weeks ago.

Federal pressure has intensified in recent days, following the testimony of CEO Marry Barra last week before Congress—testimony that didn't serve to clarify, for the most part. More hearings will follow this spring or summer.

2003 Saturn ION

2003 Saturn ION

As for the expanded ignition-lock recall, it covers the following vehicles:
  • 2003-2007 Saturn Ion
  • 2005-2010 Chevrolet Cobalt
  • 2006-2010 Pontiac Solstice
  • 2007-2010 Pontiac G5
  • 2007-2010 Saturn Sky
  • 2006-2011 Chevrolet HHR


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