Feds Ignored Complaints about GM Defect That Led to 13 Deaths: Report

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General Motors Co. (NYSE: GM) has recalled 1.6 million cars worldwide to repair a defect that led to 13 deaths. According to a report in The New York Times, the National Highway Traffic Safety Administration (NHTSA) received an average of two complaints a month since 2003 related to the defect. The NHTSA declined to investigate because “there was not enough evidence of a problem to warrant a safety investigation.”

The problem is that the weight of the key ring, perhaps coupled with road conditions, may cause the ignition switch to be jarred from the “run” position, turning off the engine and shutting down the car’s electrical power which causes the airbags to fail to deploy.

The Times reviewed the NHTSA’s public database and examined nearly 8,000 complaints made against the recalled models looking for instances of trouble with the ignition switch. It found more than 260 cases where a moving car unexpectedly stalled.

But how culpable is the NHTSA? The agency’s response to the NYT’s story is that over the past 7 years the agency has issued 929 recalls affecting more than 55 million vehicles and that the agency “uses a number of tools and techniques to gather and analyze data and look for trends that warrant a vehicle safety investigation and possibly a recall.” The 260 complaints about the GM cars is about 0.018% of the vehicles under recall according to the agency. How that is relevant is not immediately obvious.

The NHTSA’s failure does not let GM entirely off the hook. Under a law passed in 2000, automakers are legally required to report to the NTHSA any claims the carmakers receive that blame a vehicle defect for a serious injury or death. The NYT report notes that since 2003, GM has reported no fewer than 78 deaths and 1,581 injuries related to the recalled vehicles. How many of the injuries and deaths are related to the ignition switch defect is not clear.

Any federal penalties the company may face are likely to pale in comparison to the civil claims from the survivors of the 13 dead and who knows how many injured. GM’s new CEO Mary Barra has said that she leading a group of the company’s senior executives who will be monitoring the company’s response to the NHTSA’s investigation. That’s probably not how she wanted to start off her new job.

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