Young Owners of Low-Budget GM Cars Weren’t Worth Saving
Courtesy of Yves Smith of Naked Capitalism
Writer libbyliberal describes how the Obama Administration’s National Highway Traffic Safety Administration worked with GM for years to cover up the automaker’s ignition system defect that would lead to sudden power system failure. That fault is estimated to have caused at least 13 deaths and over 30 crashes. Lambert described this as a textbook case of crapification:
The style of engineering that went into that part is the same as engineering washing machines so they break down in two or three year, because every component is as light and cheap as possible; there’s no redundancy because everything is optimized for profit. If you can save a penny by shaving material off, you do it.
So some MBA drove the decision making process here, and that’s worse than the engineering that was done.
But there’s an even more cynical layer to this. When GM became aware of the defect, they refused to make the tooling changes because it would cost too much. No proposed remedy “represents an acceptable business case.”
Now consider what that means. In the famed case of exploding Pintos, Ford had calculated the number of deaths that would result from retaining the inadequate gas tank shielding that made it vulnerable to rear-end crashes and the cost per death. Ford concluded it would be cheaper for them to let people die and pay damages in litigation than spend $11 per car more for a redesigned fuel tank.
Now GM is presumably too smart to have a calculation like that in its records. But the logic of the refusing to fix it is exactly the same as with the Pinto. And one of the reasons why is that these GM cars were low-budget cars, presumably purchased by low-income people. The value of a life in a lawsuit depends on the future earning stream of the person who died. So someone with a modest income really is less worth saving to a large company than more affluent customers.
By libbyliberal. Cross posted from Corrente
Michael Moore compellingly writes in “The Price Of Human Life, According To GM”:
The executives at GM knew for 13 years that their cars had a defective ignition switch that would, well, kill people. But they did a “cost-benefit analysis” and concluded that paying off the deceased’s relatives was going to be cheaper than having to install a $10 part per car. They then covered up their findings and continued to let millions drive around with the defective part in their cars.
There would be no recalls. There would only be parents and the decapitated body parts of their dead children. See the USA in your Chevrolet. In 2007 a National Highway Traffic Safety Administration official recommended a formal investigation but was overruled by others in Bush’s “business-friendly” Transportation Department.
Shannon Jones in “The GM ignition scandal and the case for public ownership” lays out the horrifying details. First, that GM admits that in 2001 it was aware of the ignition problems on the Saturn Ion model but approved production nevertheless. Soon after there were many customer complaints pouring in about the ignition of the Chevrolet Cobalt.
When the engineers at GM finally proposed a fix for the ignition in 2005 (four years later) management rejected it.
In fact, according to the Wall Street Journal, a GM project engineering manager closed the defect investigation because “the tooling cost and piece price are too high.” He concluded that not one of the engineers’ proposals to fix the defect “represents an acceptable business case.”
Guess what their “affordable” workaround was? Are you ready for this? GM distributed a “service bulletin” to its dealers suggesting they tell customers to remove heavy items from their key rings.
According to Jones there was a malfunction in the ignition switch which could be accidentally jarred out of position causing the engine, power steering and power brakes to shut off and the airbag system to disable. The ignition defect could not only cause one to crash, but to crash without the benefit of an airbag.
Apparently GM recognized that the ignition defect easily could be triggered with the weight of a heavy keychain. Let’s face it, it could be triggered even without the heavy keychain. But that was their “buyer beware” helpful tip? Use a light keychain and you MAY not lose your engine, brakes, steering, airbag capacity .. and your life?
The cars involved in the “defect” scandal Jones reveals were low-cost bargain models. Many of the drivers were consequently young people.
2.6 million GM vehicles have been driven by people at risk of injury because of this defect. The vehicles involved, including the ones going back to 2001, are ONLY NOW being recalled! It is 2014!
On Monday, an unrelated defect from the original ignition one but which sabotages power steering has caused 1.3 million additional GM cars to be recalled.
Jones reveals that this crime against humanity was not just perpetrated by the GM industry but with the enabling of the National Highway Traffic Safety Administration (NHTSA). Jones writes:
Internal documents indicate that both GM and the National Highway Traffic Safety Administration (NHTSA), the supposed government watchdog, knew for years about fatal crashes involving GM vehicles in which airbags did not deploy and the ignition switch was in the “accessory” or “off” position. Both the company and the regulator concealed these facts from the public and failed to order a recall of the affected models.
Jones regards this amoral scenario as the “sacrifice of human life on the altar of corporate profit.”
Their criminality continued to take ever more disgusting turns as more and more evidence of the dangerousness of the GM cars came to light:
In 2006, GM quietly ordered that a redesigned ignition switch be installed starting in the 2007 model year. However, it did not assign a new part number to the device, a “cardinal sin” according to one engineer quoted by Automotive News. The decision to use the same part number points again to a deliberate cover-up.
In March of 2007 the NHTSA and GM met to discuss a fatal crash that happened back in 2005 in which airbags did not deploy. Both of these organizations made the choice NOT to order a recall. The minutes of that meeting are not accessible to public scrutiny.
Jones elaborates on the mutual betrayal to the public by both corporate and government leadership:
The collusion of the NHTSA illustrates that the government functions as an arm of big business. There is an incestuous relationship between government regulators and those they supposedly regulate. In December 2013, to cite one example, NHTSA head David Strickland announced he was resigning from his post to take a job with a law firm that lobbies on behalf of the auto industry. The same corruption that was seen in the relation of regulators to BP in the Gulf oil spill and between bank regulators and Wall Street prevails in every sector of the economy.
In “General Motors CEO stonewalls House committee on ignition scandal” Shannon Jones continues on with the GM scandal story by reporting on the Subcommittee on Oversight and Investigations of the House Committee on Energy and Commerce hearing with General Motors CEO Mary Barra and David Friedman, the acting administrator of NHTSA.
Jones’s assessment:
The hearing dragged on for four hours with few penetrating questions asked and little new information revealed.
Committee members treated Barra with deference, despite her stonewalling. In her opening remarks to the committee, Barra, who was vice president of global engineering at GM in 2008-2009, denied having any knowledge until earlier this year of the ignition switch problem. She assumed the post of chief executive this past January.
Her statement, less than two pages in length, was perfunctory and vague.
She began by declaring, “Sitting here today, I cannot tell you why it took years for a safety defect to be announced in that [small car] program…” At one point she flatly stated that GM would not make available to Congress the full findings of its internal investigation of the ignition defect.
No one on the House panel suggested that she be held in contempt of Congress or that she and other top GM executives be prosecuted on criminal charges for the cover-up. Instead, committee members again and again suggested that the problem was merely a lack of communication within the company.
Jones shares some important revelations from the hearing. Barra admitted that in 2002 GM approved an ignition switch that did not “meet its specifications” but she claimed she “had no idea why.” When she was asked about the redesigned switch that was approved years later in 2006 to be installed in 2008-10 models that still did not meet specifications a defensive Barra responded: “Just because a part doesn’t meet specifications doesn’t mean it is defective.”
When Barra was asked about the 2006 new ignition switch for the Cobalt and other GM models that was not assigned a new part number and how that suggested a COVER UP, she revealed that the GM engineer who authorized the change without the new numbering was still working for the company. The House was disinclined to explore further.
Jones goes on:
Committee members cited a chain of internal emails demonstrating that the company rejected a fix of the ignition problem due to cost considerations. In one of the emails, an engineer wrote: “I was aware of an issue with ‘inadvertent ignition offs.’” However, he said, the new part would cost 90 cents while warranty costs came to only 10 or 15 cents, so the fix would have to wait another year.
One committee member pointed to a 2005 article in the New York Times reviewing the Cobalt which noted that the car suddenly went dead while being driven. At the time, a GM spokesperson said he didn’t think it was a big issue because the car was still “controllable.” Barra claimed she did not recollect the Times article.
She made much of the fact that GM has retained attorney Kenneth Feinberg as a consultant on compensation for accident victims and their families. Feinberg, a corporate lawyer, was chosen by the Bush administration to oversee compensation for victims of the 9/11 attacks. He was subsequently appointed by the Obama administration to oversee compensation to victims of the BP oil spill. In both posts he was ruthless in limiting payouts, helping BP to save billions of dollars in damage claims. In between these jobs for the ruling class he served as the so-called “pay tsar” for the government bank bailout program, enabling Wall Street executives to continue awarding themselves seven- and eight-figure compensation packages.
Finally, the House committee interviewed David Friedman. Jones:
In his appearance before the committee, NHTSA acting administrator David Friedman sought to deflect all blame onto General Motors, claiming it withheld vital information without which the agency could not launch a full investigation. He defended the decision of NHTSA not to order a recall of GM vehicles with defective ignitions, claiming the cases were too complex and involved for the agency to make a proper determination.
He made this claim despite the fact that NHTSA investigators were aware by 2007 of hundreds of customer complaints about unexpected stalling and the agency had discovered a pattern with the Cobalt and other vehicles in which airbags failed to deploy and the ignition was in the “accessory” position.
Finally, another very troubling revelation from Shannon Jones and one that should but probably won’t be echoed in corporate mainstream media is the Obama administration’s involvement in this crime.
The Obama administration is itself deeply implicated in the cover-up. After the 2009 bankruptcy and restructuring of GM, the US government was the majority shareholder in the company until November 2010 and only recently sold off its remaining stake. The White House inserted a clause holding GM harmless from product liability lawsuits stemming from before July 2009 at a time when GM management was aware of fatal accidents involving defective ignition switches.
Yes, the profoundly corrupt Bush administration failed in its regulatory responsibilities. But once again, the Democratic Obama administration has given a serious pass to corporate perpetrators of a crime against humanity. In this case, negligent homicide.
Obama and the bank bail out scandal. Obama and the BP scandal. Obama and the GM scandal. The list of disgusting examples of Obama as protector of the corporate profiteering criminal elite continues to grow.
Too bad the Obama kool aid continues to work so very effectively with too many Americans. Even Michael Moore is optimistic at the end of his article about faux-integrous mom Ms. Barra and an Obama administration that he hopes seriously will prosecute these sociopathic economic bottom-liners.
As for the Congresspeople performing for their tv sound bites, they slide on the unhappy, scolding masks while the cameras are on to try to convince the American public how much they care about its safety and general welfare. Hah! The avalanche of lobbied money the corporatists provide them discourages any serious calls for justice.
One more round of Lucy and the football with the morally bankrupt rich and powerful: the corporatists, the corporate parties’ pols and a corporate mainstream media.
