Regarding the Recent Ignition Switch Recall by General Motors

Recently, General Motors announced a recall on millions of vehicles because of a faulty ignition switch installed in several models of Chevrolet, Pontiac and Saturn vehicles.  The recall affects seven different models between the three brand names spanning model years from 2003-2007.  General Motors, unfortunately put in a reactive position, has attempted to be as proactive as possible during this recall.

What are the Details

GM has set up a website at http://www.gm.com/ignition-switch-recall.html to let consumers know if their vehicle has been affected and giving specific instructions as to what should be done if they own an affected vehicle.  The first piece of advice for owners of these affected vehicles is to take their vehicle key off their key ring, including the key fob if their vehicle has one.

The danger with the key having additional weight to it is the faulty ignition switch could inadvertently be knocked out of the run position, shutting down the engine and electrical system, which also inhibits the airbags from deploying in case of a crash.  Owners of these affected GM vehicles need to take the recall very seriously and have the repairs done quickly.

The Social Media Nightmare

With the enormous presence of social media, especially Facebook and Twitter, General Motors is having to dodge bullets never thought of before social media.  With the ability to post and comment anyway they want to, the owners of affected vehicles have expressed their displeasure with this recall directly on the GM Facebook page.

GM has attempted so far to engage those affected, especially those who are commenting and posting on their pages to have a more private discussion, while giving the appearance they are going about business as usual.  In days before social media, a recall would have letters sent out about it, and probably make a few newspapers, but with social media, the word of mouth  is more powerful than ever.

What is the Recall Going to Cost GM

This recall, has already cost an estimated $300million and may reach over $2 billion before the end of litigation.  So far the ignition switch recall has been responsible for twelve deaths with the hopes that it doesn’t claim any more than that.

If the recent experience Toyota went through is any indication, the road is just beginning for the recall.  Toyota had estimated its recall was going to come in around $2 billion, so far it has reached $1.2 billion with an additional $66 million in fines to the National Highway Traffic Safety Administration.

In addition to the enormous cost in money, the terms of the 2009 bankruptcy bailout may be called into question as some lawsuits already filed state GM knew about the problem with the ignition switches but failed to include that in their bankruptcy for consideration.  This could result in criminal investigations of negligence, information withholding and cause GM to lose the cloud of protection provided by their bankruptcy.

Unfortunately after this long run of profitability, it appears GM might very well be heading in the wrong direction very quickly.  GM CEO Mary Barra has agreed to fully cooperate with all investigations but so far has admitted to no liability on the part of the company.  To address the recall, GM has added fifty workers to its call centers and is currently working with dealerships to expedite the recall process.