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Bending the Truth? Automakers Under Fire

Ethical lapses trigger a costly backlash.

by on May.02, 2016

Daimler is already facing two diesel lawsuits.

German automaker Daimler AG is hiring an outside auditor to make sure it hasn’t cheated on emissions tests. Mitsubishi has set up an independent panel to see just how broadly it rigged its fuel economy numbers. Volkswagen has yet to release an internal report exploring the breadth of its own diesel scam.

In recent years, a veritable Who’s Who of automakers has been caught up in one scandal or another. They’ve been caught inflating mileage figures, deflating emissions numbers and, in a number of cases, covering up serious, often fatal safety problems. That includes General Motors which took a decade to order a recall for defective ignition switches now linked to at least 120 deaths.

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In some cases, manufacturers have simply missed problems or failed to recognize their significance. In other instances, they have been willing to outright lie, said veteran auto analyst Joe Phillippi, of AutoTrends Consulting, considering such moves as “just the cost of doing business.”

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Automotive Recalls Hit New Record in 2015

Surge reflects large-scale issues like Takata airbag problem, crackdown by feds.

by on Jan.22, 2016

NHTSA Administrator Mark Rosekind wants more "vigilance in looking for defects."

Automotive recalls hit an all-time high of 51.2 million in 2015, the second record year in a row that has happened, driven in part by the massive problems with faulty Takata airbags.

The announcement by the National Highway Traffic Safety Administration at this week’s Washington Auto Show comes at a time when automakers and automotive suppliers are being driven to be more proactive in addressing problems, federal regulators showing far less tolerance and levying far larger fines than ever before for safety lapses.

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“Part of what has happened is a vigilance in looking for defects,” said Mark Rosekind, the NHTSA Administrator behind the crackdown, adding that, “getting them addressed, has been effective.”

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GM CEO Mary Barra Adds Chairman to Title

Solso becomes lead independent director

by on Jan.04, 2016

GM wants to build the best cars, not sell the most cars, CEO Barra said at a recent conference.

She stepped into the limelight – and a trial by fire. Now, General Motors CEO Mary Barra is being rewarded with an additional title, chairman of the world’s third-largest automaker.

Tim Solso, who had been serving in that role for the last two years, will step back from the chairman’s post but remain GM’s lead independent director, the job he had prior to the retirement of former Chairman and CEO Dan Akerson.

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“At a time of unprecedented change, the Board concluded it is in the best interests of the company to combine the roles of Chair and CEO in order to drive the most efficient execution of our plan and vision of the future,” said a statement attributed to Solso.

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GM Beats Q2 Forecast with Nearly $1.2 Bil Net Income

EBIT-adjusted earnings are best for any quarter since 2009 bankruptcy.

by on Jul.23, 2015

General Motors CEO Mary Barra remains upbeat about the coming months despite problems in China.

Despite being hit with a $1.1 billion special charge, General Motors managed to deliver a second-quarter profit of nearly $1.2 billion, or $0.67 a share – its biggest three-month profit since emerging from bankruptcy in July 2009 – with strong demand for its North American trucks helping fuel the strong performance.

Factoring in one-time charges equal to $0.62 a share, GM handily outperformed the Wall Street consensus forecast of $1.08 per share. And the second-quarter numbers compared with the modest $190 million, or $0.11, GM reported for the April-June 2014 numbers.

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“The first two quarters of the year were strong as we fully capitalized on a robust North American industry and maintained our strength in China, despite the challenging conditions in that market,” GM CEO Mary Barra said in a statement. “We said our goal was to improve our earnings and margins this year, and we are on plan.

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GM’s $600 Mil Victims Fund Completes Claims

Feinberg team finishes processing of benefit applications.

by on Jul.13, 2015

Kenneth Feinberg, administrator fo GM's victims compensation fund, said the team has processed all of the benefit claims.

The team administering the compensation fund for victims of General Motors faulty ignition switches, led by Kenneth Feinberg, has processed the last of the more than 4,000 claims filed seeking monetary damages.

The fund began accepting claims last August and closed the application process at the end of January, handled 4,342 claims, approving 124 death benefits and 266 injury payouts. The minimum payout for death benefits was $1 million.

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GM established the fund with $600 million, but through March 31 approximately $200 million has been paid. Ultimately, more than 90% of the claims made were denied by Feinberg and his team were denied. There is no appeal process as claimants gave up the right to any form of appeal. (more…)

Deaths Due to GM’s Faulty Ignitions Hits 100

Still 37 more death benefit claims to review.

by on May.11, 2015

GM said it has repaired more than 70% of the vehicles with its faulty ignition switch.

The number of deaths attributable to the faulty ignition switches in the 2.6 million vehicles recalled by General Motors has hit 100.

According to the latest update from Kenneth Feinberg, the administrator the $550 million victims fund established by the automaker, the number of death claims rose this week by three. There are 37 applications still to be considered after 227 have been denied. The automaker said it has repaired between 70 and 75% of the vehicles.

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In addition to the claims for death benefits, Feinberg’s staff approved 12 claims for people who suffered lost limbs, brain damage or pervasive burns in crashes, which are described as Category One. The claims for another 172 people who suffered less severe injuries that required hospitalization or outpatient treatment have also been approved, also known as Category Two injuries. (more…)

GM Ignition Switch Death Toll Rises to 97 Victims

Feinberg team continues processes claims.

by on May.04, 2015

Kenneth Feinberg, administrator fo GM's victims compensation fund, approved another round of benefits for victims.

General Motors initially claimed that 13 people were killed as a result of the faulty ignition switches that forced the recall of nearly 2.6 million vehicles last year: that number is now at least 97 people.

Kenneth Feinberg, the administrator of the $600 million victims compensation fund established by GM, released the latest results of his team’s efforts to process claims filed by victims and their families.

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The number of deaths has been slowly rising since the automaker established the fund and Feinberg and his team began sifting through the claims. In total, 474 claims were submitted for death benefits, and 97 were deemed eligible, 212 ineligible and 105 were “deficient,” which means it didn’t have enough documentation to be processed. (more…)

Court Upholds GM’s Bankruptcy Shield from Death Claims

But judge leaves potential loophole for plaintiffs.

by on Apr.16, 2015

The faulty GM ignition switch could inadvertently move to the Off position, causing a crash.

General Motors has been handed a major victory in its effort to shield itself from lawsuits linked to the defective ignition switches it used in older vehicles.

A federal judge has ruled the “new GM” is not liable for death and injury claims for crashes that occurred prior to the automaker’s emergence from bankruptcy in July 2009 – even in the event of misconduct by the “old GM.” But ruling from the federal bench in New York, Judge Robert Gerber did say owners could seek damages if they prove vehicles equipped with those switches have lost value since GM exited Chapter 11.

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The automaker hailed the news which, it said, “doesn’t establish any liability against GM.” It also noted that the burden will be on plaintiffs to prove any new claims for losses.

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2014: The Year of the Recall

Safety may remain the big story in 2015.

by on Dec.30, 2014

Barely 2 months after becoming GM's new CEO, Mary Barra was facing a Congressional investigation into the maker's ignition switch problems.

When 2014 opened, the year’s top automotive story seemed likely to be Mary Barra, General Motors’ new chief executive, and the first female CEO of a major automaker. As the year draws to a close, Barra is, indeed, still in the headlines, but enmeshed in what has turned into the year’s biggest story.

GM’s February recall of 2.6 million vehicles due to faulty ignition switches has so far been linked to more than 40 deaths. But in recent weeks, that’s nearly been eclipsed by the Takata airbag crisis that has so far led to the recall of more than 10 million vehicles and counting – federal regulators pressing to expand the service action nationwide.

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But those are only two of the many safety issues that have led the industry to recall about 60 million vehicles this year, nearly twice the previous record set back in 2004. The question is whether recalls will remain the big automotive story for 2015.

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“Government Motors” on Fire

An excerpt from Jason Vine's tell-all, “What Did Jesus Drive”

by on Dec.01, 2014

Vines holds few punches as he looks at how automakers like Ford and GM have handled big crises.

Jason Vines has served as head of public relations for both Ford and Nissan, and as part of the senior PR team at Chrysler. He’s also functioned as an outside consultant to several other major automakers, including General Motors – giving Vines an unprecedented insider’s view of some of the biggest crises to shake the industry over the last two decades.

That includes the Ford/Firestone exploding tire disaster blamed for 271 deaths, as well as the ongoing General Motors ignition switch debacle. In this excerpt from Vines’ new book, “What Did Jesus Drive,” he offers a devastating, inside look at GM’s attempt to handle that scandal.

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Two weeks before GM’s first Congressional hearing regarding the ignition switch debacle, Selim (ed: former GM PR chief Selim Bingol) was on the phone. “Any advice,” he said. “You’ve been through this shit.”

Up to now, GM had been vigorously putting out CEO Mary Barra in every form of communications thinkable, apologizing profusely for the past transgressions of the “Old GM” and the humanity of the “New” post-bankruptcy GM, including a hideous video in which Barra looked like she was a prisoner at the Hanoi Hilton in ‘Nam.

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