August 23, 2017


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GM’s ‘renaissance’ should be recalled

Hey there, time traveller!
This article was published 1/4/2014 (1240 days ago), so information in it may no longer be current.

Wondering why General Motors went bankrupt and needed a taxpayer bailout? Just consider the Chevrolet Cobalt. Introduced in 2004 as the vehicle that would finally make GM’s small cars competitive with those from Japan, the Cobalt’s mediocre performance translated into, at best, so-so sales.

Beneath its shiny surface, the product was even worse than the motoring public realized. For all the money and public-relations puffery GM poured into the Cobalt’s launch, the company apparently couldn’t be bothered with such details as a properly working ignition switch. Instead, it settled for parts that occasionally caused the car to shut off while in motion, disabling both the power steering and air bags. This failing has been linked to multiple accidents and 12 deaths. Despite ample warnings from inside the company and many consumer complaints, GM swept the problem under the rug, until now. Far too late, it has recalled 2.6 million vehicles that may contain the potentially deadly defect.

For GM, still struggling to shake off the "Government Motors" stigma, the fiasco is a reminder that, despite much progress, its renaissance is incomplete. The public cannot be sure that taxpayer money bought a truly new GM unless and until new chief executive Mary Barra — herself a GM "lifer" — eradicates all vestiges of the buck-passing management culture that produced the Cobalt. Ms. Barra must demonstrate credibly that she is on top of the company’s quality problems, past and, more important, future. In that sense, GM’s fresh recall of certain Chevy Cruze models is a mixed blessing: The company is taking action, but the Cruze is GM’s small-car successor to the Cobalt.

There are lessons here for government as well. The National Highway Transportation Safety Administration received indications of a problem with the Cobalt in 2007 and again in 2010 but took no action. Congress needs to know why.

Meanwhile, GM was facing consumer lawsuits and settling them out of court. Details of those settlements were kept secret under confidentiality agreements — which plaintiffs and their lawyers commonly, and understandably, accept in return for prompt compensation without a trial. We can’t help but wonder whether the Cobalt’s defects might have come to light sooner — or whether GM might have felt more pressure to correct them — if the details of those lawsuits were subject to public disclosure.

Under a 2000 federal law, GM and other automakers must report the existence of safety-related lawsuits and other consumer problems to NHTSA. But the agency gets more detailed information, including court documents, only if it requests it. NHTSA regulations often bar public requests for disclosure of those details on the grounds that it is "business information" susceptible to unfair exploitation by a company’s competitors.

Senators are proposing legislation that would require automakers to send NHTSA the accident report or other documents that first alerted them to a fatal accident. NHTSA would be required to make those documents public unless they are exempted from public disclosure under the Freedom of Information Act. The sad story of the Cobalt suggests that the senators’ idea is worth considering.


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