Financial News

  • 19 June 2014, 15:12

GM Ignition Fault 'May Have Killed 100 People'

Up to 100 deaths could be linked to a faulty ignition switch in GM cars that the firm failed to rectify for more than a decade, a US lawmaker has warned.

Representative Diana DeGette, a Colorado Democrat, mooted the figure as she grilled GM chief executive Mary Barra at a congressional hearing on Wednesday. 

The number is higher than the 13 people the company says died in crashes linked to the problem, and nearly double the death toll of 53 cited in lawsuits.

GM engineers had known about the defective switch since 2001, but the firm did not recall the vehicles until this year.

The US government fined GM $35m (£20m) last month, but critics pointed out that amounted to less than a day's revenue for the car-maker.

In her second appearance on Capitol Hill over the scandal, Ms Barra told the House committee lessons had been learned.

"I never want anyone associated with GM to forget what happened," she said in her prepared remarks.

"This is not another business challenge. This is a tragic problem that should never have happened and must never happen again."

Earlier this week the car-maker announced a new recall of 3.36 million vehicles because of ignition switch problems, on top of the 2.6 million Chevrolet Cobalts, Saturn Ions and other cars recalled in February.

The House Energy and Commerce Subcommittee on Oversight and Investigations asked why it had taken GM so long to act.

Its members questioned whether the company's culture could change, and if this month's dismissal of 15 employees was really enough.

The lawmakers also said that a report paid for by GM into the scandal had failed to answer key questions.

The 315-page report, made public on June 5, blamed the faulty ignition switch on a rogue engineer.

"It does not fully explain why stalling was not considered a safety issue within GM," Ms DeGette said. 

"And most troubling, the report does not fully explain how this dysfunctional company culture took root and persisted."

The lawmaker said senior executives, including Ms Barra, should have acted sooner.

Representative Fred Upton read a 2005 email from a GM employee who recommended a "big recall".

The firm also failed to act on reports it received in 2007 and 2010 about the malfunction.

The defective ignition was prone to turning off, causing the engine to shut down and disabling the air bags.

Ms Barra told the hearing that she had been encouraging people to speak up about potential safety issues.

The company had issued 44 recalls of 18 million cars in the US this year, she added, as part of a tougher approach to safety.