Well, it looks like New GM is not much different than Old GM when it comes to addressing serious safety issues on its vehicles. The Associated Press reports that General Motors CEO, Mary Barra, claims that GM has not turned up any other major safety issues. I guess Ms. Barra feels that two tons of steel traveling at high speeds with brake lines that can burst at any moment is nothing to be concerned about. The continued denial by GM that there is no safety issue with their trucks that are prone to brake line corrosion proves that the company has a long way to go before they change a culture that puts profits ahead of motorists' safety.
The long-awaited General Motors recall report, which was compiled by attorneys with longstanding and lucrative ties to the company, has been released with few surprises. GM-hired attorneys claim that no high-level executives at the company were responsible for the deadly ignition switch recall delay that cost at least 13 people their lives. The report does nothing to vindicate GM. The company's management must be investigated by the Justice Department.
Everyone in Washington favors "reform." Unfortunately, the term can be highly deceptive. Such is the case of the Housing Finance Reform and Taxpayer Protection Act of 2014 (S.1217), a bill that would abolish troubled mortgage giants Fannie Mae and Freddie Mac in favor of a federally-backed private insurance system. Last Thursday, the Senate Banking Committee approved the measure by a 13-9 vote. Yet the bill, sponsored by Sens. Tim Johnson, D-S.D., and Mike Crapo, R-Idaho (in photos), may never reach the Senate floor - and not undeservedly. For the real problem with Fannie Mae and Freddie Mac, which now are profitable and have more than repaid their federal bailout debt, is not their existence; it is their subjection to tight federal control.
Today, I sent this letter to David Friedman (in photo), Acting Administrator of the National Highway Traffic Safety Administration (NHTSA):
On March 30, 2010 NHTSA's Office of Defect Investigations opened Preliminary Investigation PE10010, into corrosion-related brake line failures in General Motors full-size pickups made between 1999 and 2003. In January 2011, that investigation was upgraded to ODI Engineering Analysis EA11001, which in part appears to determine if corrosion-related brake line failures were a General Motors-specific issue or industry-wide. The "Engineering Analysis" investigation remains open to this day after over three years, making it NHTSA's longest-running open investigation, and the second longest investigation in its history.
GM's initial response to our request yesterday for a recall of vehicles with a brake corrosion problem is completely unacceptable. It was contained in a Detroit News article about our call for the carmaker to recall 6 million pickups and SUVs that are the subject of an open investigation by the National Highway Traffic Safety Administration (NHTSA).
GM spokesman Alan Adler, in photo, claimed that the brake corrosion problem is industry-wide, and suggested it was a normal wear-and-tear issue. He told the News:
The trucks in question are long out of factory warranty and owners manuals urge customers to have their brake lines inspected the same way brake pads need replacement for wear. In fact, more than 20 states require brake-line inspections at one- or two-year intervals or when stopped for a violation.
It looks like there is yet another problem with GM vehicles that has been left unresolved. Chevy Silverados and other GM vehicles are being investigated for brake line corrosion by the National Highway Traffic Safety Administration (NHTSA). NHTSA reports 890 complaints for brake failure resulting from "brake pipe corrosion."
General Motors reported lackluster first quarter earnings' results as the company took a $1.3 billion charge related to recalls. Most of the expenses for the approximately 7 million vehicles recalled, however, were not actually incurred during the first quarter.
In addition, the $1.3 billion figure is far lower than what the recall will cost GM. The power steering recall alone of about 1.5 million vehicles (which was prompted by NLPC's exposure of the recall delay) is likely to cost more than that. The estimated cost for replacement of power steering columns is in the area of $1,300 per unit, bringing the total for this single recall to roughly $2 billion. That doesn't include loaner cars.