$750 Million Set Aside for GM Recall

Facing congressional hearings on their failure to fix deadly safety defects in several models of vehicles, General Motors announced that it would set aside $750 million in the first quarter to cover the cost of repairs to vehicles recalled. Of the five million vehicles GM has recalled, almost three million of those were to replace defective ignition switches that have been linked to at least 13 deaths.

Congressional Hearings

Chief executive for GM, Mary Barra, has testified before Congress regarding GM’s failure to fix the vehicles. The House Energy and Commerce Committee is conducting an investigation into whether the automaker ignored the defects in the vehicles. They are also being investigated by the National Highway Traffic Safety Association (NHTSA) and the Department of Justice as to why the recalls were not done sooner.

Ignition Problems

GM has been aware of the ignition problems for at least a decade, according to information filed with the NHTSA. The faulty switches can shift positions, shutting off the vehicle, which leads to failure of safety features that include power brakes, power steering and air bags. Models affected include the Saturn Ion, Saturn Sky, Chevrolet HHR, Pontiac Solstice, Chevrolet Cobalt and Pontiac G5 in various model years. The automaker admits that the problem caused accidents but claims it is unaware of any deaths that occurred as a result of those accidents.

NHTSA at Fault

The NHTSA claims GM failed to provide it with crucial information that would have instituted recalls years ago. However, some experts also fault the NHTSA after reports showed the agency failed to open investigations on two separate occasions, even though a pattern of problems was discovered in 2007. In one report, NHTSA said, erroneously, that air bags would continue to operate for as long as 60 seconds after the vehicle lost power.