General Motors Misled Grieving Families on a Lethal Flaw
By HILARY STOUT, BILL VLASIC, DANIELLE IVORY and REBECCA R. RUIZMARCH 24, 2014
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.
In one case, G.M. threatened to come after the family of an accident victim for reimbursement of legal fees if the family did not withdraw its lawsuit. In another instance, it dismissed a family with a terse, formulaic letter, saying there was no basis for claims.
Amy Kosilla died in a Cobalt accident in March 2010. Credit Kosilla Family
“We sent the paperwork for the car to them and they said there’s nothing to this,” said Neil Kosilla, whose 23-year-old daughter, Amy, died in a Cobalt accident in March 2010 after the air bags failed to deploy. “They said we had nothing.”
Since the engineers’ meeting in May 2009, at least 23 fatal crashes have involved the recalled models, resulting in 26 deaths. G.M. reported the accidents to the government under a system called Early Warning Reporting, which requires automakers to disclose claims they receive blaming vehicle defects for serious injuries or deaths.
A New York Times review of 19 of those accidents — where victims were identified through interviews with survivors, family members, lawyers and law enforcement officials — found that G.M. pushed back against families in at least two of the accidents, and reached settlements that required the victims to keep the discussions confidential.
In one of those cases, the company settled a lawsuit brought by the family of Hasaya Chansuthus, 25, who crashed her 2006 Cobalt in Murfreesboro, Tenn. After resisting, the company negotiated a deal even though Ms. Chansuthus’s blood-alcohol level was more than twice the legal limit. Data from the black box — which records vehicle systems information — showed that the key was in the accessory or off position, according to court documents, and the air bags did not deploy. (The accessory position turns off the car, disabling the air bags, but allows certain electronics, like the radio, to run.) The terms of the settlement are confidential.
In other instances, G.M. ignored repeated calls, families said. “We did call G.M.,” said Leslie Dueno, whose 18-year-old son, Christopher Hamberg, was killed on June 12, 2009 — not quite a month after the critical May 15 meeting of G.M. engineers about the ignition data — driving his 2007 Cobalt home before dawn in Houston. He lost control at 45 miles per hour and hit a curb, then a tree, the police report said. “Nobody ever called me. They never followed up. Ever.”
Last month’s recalls of the Cobalt and five other models encompassed model years 2003 through 2007. G.M. faces numerous investigations, including one by the Justice Department looking into the company’s disclosures in its 2009 bankruptcy filing as well as what it told regulators.
Christopher Hamberg, 18, died in a Cobalt accident in June 2009. Credit Hamberg Family
In the bankruptcy agreement, G.M. was shielded from liability for accidents that occurred before July 10, 2009.
“We are conducting an unsparing, comprehensive review of the circumstances leading to the ignition switch recall,” G.M. said in a statement on Monday. “As part of that review we are examining previous claims and our response to them. If anything changes as a result of our review, we will promptly bring that to the attention of regulators.”
G.M. has said it has evidence of 12 deaths tied to the switch problem, but it has declined to give details other than to say that they all occurred in 2009 or earlier. It says it has no conclusive evidence of more recent deaths tied to the switch.
“We are doing our best to get this right, which means reviewing the data with care,” the company said in its statement. “Not every Cobalt accident is a result of a faulty ignition switch. Accident claims and E.W.R.” — Early Warning Reporting — “data are unique, with their own set of facts and other relevant factors. It is wrong to use this information on a speculative basis. Each requires additional analysis and this will be a part of our review.”
It was unclear how many of the 26 deaths since the 2009 meeting were related to the faulty ignition, but some appeared to fit patterns that reflected the problem, such as an inexplicable loss of control or air bags that did not deploy. In some cases, the drivers had put themselves at risk, including having high blood-alcohol levels or texting.
Still, by the time Benjamin Hair, 20, crashed into a tree in Charlottesville, Va., on Dec. 13, 2009, while driving a Pontiac G5 home, G.M. had conducted five internal studies about the ignition problem, its records indicate.
Though Mr. Hair used his seatbelt, he died after the car’s air bags failed to deploy. His parents were baffled. “The police couldn’t tell us what caused the accident,” said Brenda Hair, his mother. The Hairs contacted G.M., providing accident reports but no vehicle data, because the car’s black box had been destroyed. “They came back and said they’d presented it to their board of engineers, and they couldn’t say it was related” to a defect, Ms. Hair said.
By then, employees who knew about the switch problems ranged across the company, from its legal offices at headquarters in Detroit to its test tracks and research labs outside the city. G.M. lawyers had known of one fatal Cobalt accident in 2005, and had settled or worked on several cases. G.M.’s sales department had issued two service bulletins to dealers related to faulty switches, advising them to tell customers to drive without heavy key chains that could jostle the ignition and shut down the car.
On the manufacturing side, the ignition switch as well as the key had been modified for new cars in the middle of model production in late 2006 or early 2007, — an unusual move for such a high-volume part.
By the summer of 2010, G.M. had ended production of Cobalts. Around the same time, three company representatives traveled to a scrapyard in Scranton, Pa., to remove the black box from a 2005 Cobalt that crashed in January 2010, killing Kelly Erin Ruddy, 21. Her mother, Mary, accompanied them. A few days later, on Aug. 4, Mrs. Ruddy received a voice mail message from a G.M. claims administrator named Jemeia Price. In the message, which Mary Ruddy played for a reporter, Ms. Price said that though she had spoken with Ms. Ruddy before, she would not be able to speak again.
“Unfortunately, if you happen to leave me any more messages I won’t be returning those calls,” said the voice mail. “All communication needs to go through your attorney.”
Samantha Rowback lost control of the 2006 Cobalt that her brother, Allen Ray Floyd, died in two weeks later in 2009. Credit Mark Courtney for The New York Times
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In the fall of 2013, months after an eighth internal study on the ignition issue had been issued, G.M. moved to cut off the flow of damaging depositions related to one accident by settling a wrongful-death suit. The suit had been brought by the family of Jennifer Brooke Melton, 29, who lost control of her 2005 Cobalt on a Georgia highway in March 2010 when the key moved to the accessory position, shutting down power and air bags.
When Lance Cooper, a lawyer for the Melton family, deposed Victor Hakim, a senior manager at G.M., Mr. Cooper read more than 80 customer complaints into the official record that were filed with G.M. beginning in 2005 about Cobalts that had unexpectedly stopped and stalled.
G.M. settled the case on Sept. 13. Under the terms of the settlement, the details are confidential.
That same month, lawyers representing G.M. wrote to the lawyer in another wrongful-death case demanding that the lawsuit be withdrawn. The family of Allen Ray Floyd had sued G.M. after Mr. Floyd lost control of a 2006 Cobalt in daylight near Loris, S.C. Two weeks earlier, his sister had lost control of the same vehicle on the same road; she had it towed. The company contended the suit was “frivolous” because the accident occurred on July 3, 2009, a week before the company’s bankruptcy agreement took effect, which meant G.M. was not liable for damages.
“They sent us a letter in September telling us to drop our case or else they’d come after us,” said William Jordan, the family’s lawyer. “They were going to come after me for sanctions, to pay their attorneys’ fees.”
Mr. Jordan added: “We looked at the prospect of going into bankruptcy court and duking it out with them and looking at the language of the bankruptcy legislation, and it just seemed to be such a big undertaking. We decided to capitulate.”
Samantha Rowback's brother, Allen Ray Floyd, died in a Cobalt accident in July 2009. Credit Courtesy Samantha Rowback
Consumer complaints and claims came to the company in a variety of ways — through lawsuits, calls, letters and emails, warranty claims, or insurance claims. G.M.’s legal staff was the recipient of lawsuits, insurance information, accident reports and any other litigation-related paperwork. But warranty claims and customer calls were routed through the sales and service division — a vast bureaucracy that occupies most of one tower at G.M.’s headquarters in Detroit. Because the legal staff reports to the chief executive, and the sales department to the head of G.M. North America, it is unclear whether they share information related to a specific car, like the Cobalt.
And an even bigger communication gap on the Cobalt appeared to exist between the engineers in Warren, Mich., and the company lawyers in downtown Detroit. The most glaring example was that G.M. officials meeting with federal regulators in March 2007 did not know about a fatal Cobalt wreck in 2005 — even though G.M.’s legal department had had an open file on the case for almost two years.
Within the product development system was an isolated, subgroup of engineers assigned to Cobalt safety tests. According to the chronology G.M. has submitted to federal safety regulators, an unknown number of engineers were involved in opening — and closing — four separate inquiries on the Cobalt between 2004 and 2009. Engineers also performed four other analyses.
By the end of 2007, G.M. had examined data from nine “sensing and diagnostic modules” of crashed vehicles. In four cases, the ignition was in the accessory position. But it was not until May 15, 2009, that G.M. engineers verified the data. That day, they met with officials from its supplier Continental, which manufactured the Cobalt’s diagnostic modules, or black boxes. By then G.M. had recovered 14 modules, and according to Continental, the ignition was in the accessory position on seven of the 14 cases. This appears to be the first proven link between a faulty switch and deactivated air bags.
There is no indication that the engineers shared this finding with supervisors or executives. One reason may have been distraction: Two weeks later, the company filed for bankruptcy.
After more study, by Oct. 29, 2013, G.M. could no longer ignore that something was very wrong with the switches.
G.M. officials met that day with the supplier Delphi. Records showed beyond any doubt that substandard ignition switches had been made for the Cobalt at a Delphi plant from 2004 to late 2006. The part had been changed, and every switch made before the change was potentially a fatal accident waiting to happen.
Confirmation of the change was presented on Dec. 17 to the senior Field Performance Evaluation Review Committee, a group so powerful that Mary T. Barra, the head of global product development who was named chief executive a month later, knew of the meeting.
Yet it was not for another six weeks, on Jan. 31, that the review committee directed a recall. And still another two weeks, Feb. 13, before G.M. announced that it was recalling 778,000 vehicles for a safety defect. The number of vehicles was more than doubled to 1.6 million on Feb. 24.
In recent weeks, the parents of Benjamin Hair, the 20-year-old from Virginia killed in December 2009, received a postcard from G.M. announcing the recall. It was one of dozens of letters about their son’s car that the company has sent since the crash.
“How many times do I have to tell them?” his mother said. “We don’t have the car, and we don’t have our son.”http://www.nytimes.com/2014/03/25/business/carmaker-misled-grieving-families-on-a-lethal-flaw.html?hpw&rref=business&_r=1#story-continues-7