General Motors recall faces US investigation
- 11 March 2014
- From the section Business
A US congressional committee has said it is investigating General Motors' recall of nearly 1.6 million vehicles over faulty ignition switches.
The problem could turn off the engine in affected vehicles while they were being driven, disabling the airbags.
The carmaker announced the recall last month, but it has admitted employees knew about the defect as early as 2004.
The issue has been linked to 13 deaths and GM has also launched an internal investigation into the matter.
Meanwhile, a recent report by the New York Times claimed that the US safety regulator had received more than 260 complaints over the past 11 years about GM vehicles that "suddenly turned off while being driven".
"But they declined to investigate the problem," the report alleged.
The US House Energy and Commerce Committee said that it is also investigating the National Highway Traffic and Safety Administration's (NHTSA) response to consumer complaints related to the problem.
Fred Upton, chairman of the committee, said: "Did the company or regulators miss something that could have flagged these problems sooner?"
He added: "We plan to seek detailed information from both NHTSA and GM and will hold a hearing in the coming weeks."
The recall covers six models: the 2005-07 Chevrolet Cobalt, 2006-07 Chevrolet HHR, 2007 Pontiac G5, 2006-07 Pontiac Solstice, 2003-07 Saturn Ion, and 2007 Saturn Sky.
Recalls are not uncommon in the industry.
However, the issue is being linked to deaths and General Motors' admission that employees knew about the defect for many years may prove tricky for the company.
The NHTSA has already demanded detailed information from GM about when it knew of the problem and how it handled it.
The carmaker could face fines if the regulators rule that it took too long to report safety issues.
The company also faces recall and repair costs as well as potential liability claims.
On Monday, the company said it had hired Anton Valukas, the Chicago-based lawyer who led the court-ordered investigation of the collapse of Lehman Brothers in 2008, to lead its internal inquiry into the matter.
GM spokesman Selim Bingol said Mr Valukas "has been charged to go where the facts take him and give the company an unvarnished report on what happened".
The recall and the related investigations are the first major challenge for the new chief executive, Mary Barra.
It also comes as GM reported a 22% drop in profits for 2013, hurt by disappointing performance outside North America.
GM made a net profit of $3.77bn (£2.31bn) for the last financial year, down from $4.86bn (£2.98bn) recorded in 2012.