Former head of the National Highway Traffic Safety Administration (NHTSA), Joan Claybrook, has weighed in on the deadly delay by General Motors on a recall for a defect that is alleged to have resulted in 13 deaths and 33 accidents. Ms. Claybrook appeared on the Cavuto Show on Fox Business where she blasted both GM and NHTSA for waiting 10 years to recall the defective models and went as far as saying that there should be criminal charges brought against GM by the Justice Department.
The National Highway Traffic Safety Administration (NHTSA) is opening an investigation into General Motors' response to an ignition-switch defect that has been linked to 13 deaths, prompting a recall of 1.6 million vehicles. As I have previously reported, the ignition-switch problem has been known for years. What took NHTSA so long?
NHTSA is an executive branch agency, part of the Transportation Department. According to its website, NHTSA "is dedicated to achieving the highest standards of excellence in motor vehicle and highway safety. It works daily [emphasis added] to help prevent crashes and their attendant costs, both human and financial."
New evidence is surfacing that General Motors has known for years about the deadly defects in its vehicles (as I suggested here last week) that are just now being recalled. The defects have led to the deaths of at least six people and are the basis of an ongoing lawsuit against GM.
The deadly recall delay by GM has garnered the attention of Mainstream Media as usually GM-friendly sources like USA Today, The New York Times, CNN Money and even CBS Evening News have rightfully decided that the accusations of deplorable behavior by GM deserve to be shared with the public. It is time for GM to explain its handling of the delayed recall that only came after a lawsuit settlement with one of the victims.
Fannie Mae and Freddie Mac formally are known as Government-Sponsored Enterprises, or GSEs. These days the "S" might stand for "stolen." A group of their shareholders are arguing as much in federal court in Perry Capital v. Lew. The U.S. Treasury Department, claim the plaintiffs, overstepped its authority by impounding profits in perpetuity through its "sweep" rule of 2012. On Wednesday, February 5, the group, Shareholder Respect, held a conference in Washington, D.C. to highlight its view that the rule violates the terms of the temporary conservatorship under which Fannie Mae and Freddie Mac have been forced to operate since 2008.
General Motors announced disappointing earnings results today and issued a warning that first quarter results will underwhelm as well. The reasons behind the earnings' miss are surely going to be explained away by pundits and proponents of the company still known as Government Motors to many. Sorting through the smoke and mirrors can lead to some important and simple explanations as to what is going on at GM.
The Obama Administration may have sold the last of the taxpayers' shares in General Motors, but it appears that politics will continue to play a powerful role in the management of the company. New GM CEO Mary Barra did not seem too concerned about appearances when she attended the State of the Union as Obama's guest. Her predecessor Dan Akerson in previous months had gone to great lengths to distance GM from the federal government.
General Motors is now approaching its fifth year of existence since emerging as a new entity as a result of the 2009 auto bailouts which saw taxpayers fund a bankruptcy process to the tune of $50 billion. Much has been debated about the "success" of GM since the controversial government-orchestrated restructuring. While GM management recently announced a dividend in an attempt to ensure investors of financial stability, a more telling indicator of the likelihood of future profitability may be found through an analysis of how competitive the company's vehicles are.