My Uncle Johnny must be banging on the lid of his coffin, trying to get out.
He devoted nearly 30 years of his life to his beloved General Motors, traveling around central Kentucky, calling on Chevrolet dealers and selling them all Chevy models.
Never mind that he held GM stock that was worth $80,000 at one point but was worth $800 when he died a few years ago. He still loved the company.
But look at GM now. It has utterly disgraced itself. For 10 years, from 2004 to early this year, management employees knew there was a problem with ignition switches in certain models suddenly switching off when bumped or jostled. GM has said that it knows of 13 deaths tied to the failure of ignition switches, which caused Chevrolet Cobalts and Saturn Ions to lose engine power and deactivate air bags. The number of deaths could be higher, of course.
In a Sunday New York Times story, Transportation Secretary Anthony R. Foxx said GM’s unwillingness to share information about defective switches with regulators most likely resulted in lives lost.
“Literally, silence can kill,” Foxx said in a news briefing.
During its decade of silence, GM even made significant upgrades to the part sometime in 2006 but did not give the new part a new number and didn’t issue any recalls, thus continuing the cover-up.
An Automotive News article in March quoted former GM engineers who said the company’s reports to federal regulators describe a sequence of events that was fundamentally at odds with standard operating procedure.
The article said:
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.”
Early this year, the cover-up spun out of control, and GM began recalling millions of cars. At least 2.6 million of those recalls involve Cobalts and Ions.
Last Friday, the U.S. Transportation Department fined GM a record $35 million for failing to disclose problems with the ignition switches. GM agreed to the fine and also agreed to report safety problems faster and let government regulators oversee its safety operations.
GM is now desperately trying to counter what looks like irreparable damage to its reputation. Recently, the company created the position of first vice president in charge of global safety; it has recalled a total of 13.8 million vehicles (more than five times the number of cars and trucks the company sold in the U.S. last year); and chief executive Mary Barra has told a congressional committee in April that the company was intent on swiftly rooting out the problems and fixing them.
So far, the scandal doesn’t seem to have had a significant effect on sales. GM reported that it delivered 254,076 vehicles in the United States in April 2014. Total sales were up 7 percent compared with a year ago. Fleet sales were up 5 percent, and retail sales were up 8 percent.
You can expect more developments and more details to unfold, however, and it will surprise me if GM doesn’t lose a significant amount of market share in the months ahead.
The damage is already being reflected in GM’s stock price, which has sunk about 20 percent so far this year.
I can tell you this…I will never buy another GM product. (Haven’t owned one in more than 25 years, anyway.) A 10-year cover-up? It’s a certifiable outrage. Plenty of other good auto options exist, and it wouldn’t bother me if the company sank into the abyss.
I sure miss my Uncle Johnny, but I’m glad he’s not around to see this.