General Motors Fined While Federal Judge Could Force GM To Park All Vehicles Involved In "Switchgate" Recall

GENERAL MOTORS FINED WHILE feDERAL JUDGE COULD FORCE GM TO PARK ALL Vehicles INVOLVED IN "SWITCHGATE" RECALL

There are numerous lawsuits popping up against General Motors due to a recall fiasco which has been dubbed “Switchgate”. Faulty Chevrolet, Pontiac, and Saturn ignition switches have been linked to at least 31 accidents and 12 deaths, according to ABC News. The problematic switch has prompted the recall of 2.6 million small cars.

According to the New York Times, General Motors has been fined $28,000 for its failure to cooperate in the National Highway Safety Administration's "Switchgate" investigation. Federal safety investigators are fining General Motors $7,000 per day for failing to respond to more than one-third of their requests for information about a faulty ignition switch.

On April 3rd it was reported by Bloomberg that the judge hearing the Silvas’ case could force GM to tell customers to park their recalled vehicles until further notice. The Silvas' lawsuit stems from vehicle owners upset because of diminished resale value because of the recall. They are asking for class action status.

There are additional lawsuits going on involving wrongful death that are complicated because there is a question as to whether GM hid the switch problems during their 2009 bankruptcy. If they are found guilty, plaintiffs could be allowed to sue “New GM” for accidents and deaths that occurred before the restructuring was finalized. The initial reports indicated that problems with Chevrolet, Pontiac, and Saturn ignition switches began surfacing in 2004, ten years before the “Switchgate” recall. More recently, however, according to an article by Richard Read with thecarconnection.com entitled, “Switchgate Update: GM On Trial & On Capitol Hill”, “GM says that it knew there might have been problems as early as 2001, long before the first recalled vehicles rolled into showrooms”.

According to CNN, GM has announced recalls of nearly 7 million vehicles this year (2.6 million related to the ignition switch problem). And, according to Automotive News, the General Motors' investigation of faulty ignitions turned up more than 250 crashes in which airbags failed to deploy on cars that have not been recalled, according to a lawsuit filed against GM. The lawsuit alleges that GM has not recalled all of the defective cars.

The suit says GM rejected changes recommended by engineers in 2005 that would offer a 'sure solution' due to the cost involved. “GM’s engineers understood that increasing the detent in the ignition switch alone was not a solution to the problem,” the lawsuit says, “but GM concealed — and continues to conceal from the public...the nature and extent of the defects, which the current recall will not cure.” Many, if not all, of the unrecalled vehicles that lawsuit refers to have been recalled since that lawsuit was filed.

The order to park all vehicles involved in the "Switchgate" investigation is a result of the Silvas' lawsuit which is regarding the diminished resale value of the cars, not from the wrongful death suits. They are seeking up to $10 billion in damages from GM for a "fail-safe solution" to the problem which involves the steering, brake and airbag systems shutting off without warning. The park order would stay in effect until the full recall and repair of the vehicles could be carried out.

So how much would the ‘park order’ cost General Motors?

Reported by Law360, New York (April 10, 2014, 9:01 PM ET), General Motors Company told the Texas federal court that the plaintiffs suing to force GM to park the 2.5 million recalled cars, should post a bond, which reportedly would cost up to $1 billion dollars. GM continued to argue that Rule 65 of the Federal Rules of Civil Procedure requires the plaintiffs to post a security bond that reflects the costs that the automaker may incur in complying with a “park it now” notice, if the injunction turns out to be wrongful.

The plaintiffs have argued that they don’t have the financial resources to post a bond and that GM would not incur monetary losses by asking the drivers to park their cars. GM argued that the plaintiff’s had not shown proof to support their claims that if additional keys are removed from the ignition key chains that that cars would run into an ignition problem.

GM has argued that the plaintiffs have not shown expert proof to support claims that problems would arise with only the ignition key being used.

NHTSA RECALL REPORTS:

General Motors LLC (GM) is recalling certain model years:

2005-2010 Chevrolet Cobalt
2006-2011 Chevrolet HHR
2007-2010 Pontiac G5
2006-2010 Pontiac Solstice
2003-2007 Saturn Ion
2007-2010 Saturn Sky
2005-2007 Chevrolet Cobalt, and 2007 Pontiac G5 vehicles. 2006-2007 Chevrolet HHR and Pontiac Solstice vehicles and 2003-2007 Saturn Ion vehicles
2007 Saturn Sky vehicles
2008-2010 Chevrolet Cobalt, Saturn Sky, and Pontiac G5 and Solstice,
2008-2011 Chevrolet HHR vehicles.

The information provided in this article was obtained from the
various sources cited herein and does not reflect the opinions of
I-ENG-A.