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GM Faces Increasing Pressure to Park Recalled Cars

Maker could face challenge coming up with millions of loaners.

by on Apr.04, 2014

Despite GM CEO Mary Barra telling a Senate subcommittee she would let her own son drive one of the 2.5 million recalled vehicles, the company may be forced to ground all of them until they can be repaired.

General Motors is coming under increasing pressure to tell the millions of owners impacted by an ignition switch recall to park those vehicles until it can make the necessary repairs – and a federal judge could order such a step today.

But such move – which is being backed by plaintiffs’ attorneys, as well as several members of the Senate – could create a nightmare for the embattled automaker which would need to scramble to come up with as many as 2.5 million loaner vehicles so owners wouldn’t be left without transportation.

Beyond the Headlines!

GM is so far resisting such a move. While it already has offered to provide loaners for owners who didn’t want to drive any of the recalled cars, CEO Mary Barra told a Senate subcommittee this week that the vehicles are safe as long as there is nothing hanging from the ignition key.

“(If) there was any risk, I would ground these vehicles across the country,” Barra declared this week during the second of two days of often harsh grilling on Capitol Hill. The first female chief executive of a major global automaker, Barra was hammered by critics who suggested the maker was engaging in a cover-up of the ignition switch problem.

Of course, it didn’t help that GM’s own internal documents suggest it knew of the problem as much as a decade or more before the recall was first announced in mid-February, initially covering about 800,000 older compact sedans. Since then, GM has expanded the breadth of the service action which now covers more than 2.5 million vehicles worldwide. At least 13 deaths and 32 crashes have been linked to the problem in the U.S. and Canada.

At the heart of the issue is an ignition switch that can inadvertently switch off under certain conditions – most commonly if a motorist has a lot of weight on the key ring. In such an instance, the car’s engine will stall, and its power brakes and steering, as well as the airbag system, will be disabled.

GM has been scrambling to do damage control but it hasn’t been easy, especially for Barra who placed herself in the hot seat as the face of the company’s efforts to deal with the crisis. Along with the grilling she faced in the Senate and House this week, Barra and GM are facing a separate investigation by the U.S. Justice Department. Meanwhile, there are calls for the automaker to set up a victims’ compensation fund – and growing demands for the company to ground all vehicles involved in the recall.

Perhaps not surprising, some of the loudest voices are those of plaintiffs’ attorneys who currently are suing GM in connection with ignition switch crashes – or who are putting together possible class action lawsuits.

That includes Texas personal attorney Robert Hilliard, who will today ask a federal judge to order GM to tell owners the vehicles are unsafe to drive.

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“Ground every recalled vehicle and do to it now,” Hilliard demanded in a letter sent to Barra yesterday. The attorney cited a claim by Laura Valle, the owner of a 2007 Chevrolet Cobalt, who claimed to have had her car stall out last month even though it had removed all but the ignition key from her key ring.

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Hilliard’s request will go before U.S. District Judge Nelva Gonzales Ramos in the federal court in Corpus Christi on Friday afternoon.

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To date, GM has provided about 13,000 loaner vehicles but going much beyond that could be a challenge. Several of the maker’s dealers have said they’ve even had trouble coming up with temporary replacements from local rental car firms.

GM plans to begin replacing the defective ignition switches this week but considering the size of the recall, the entire process is expected to take months to complete.

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