GM expands recall, suspends 2 engineers, takes $1.3 billion charge
GM told U.S. safety officials that it will also replace the ignition lock cylinders in millions of recalled vehicles that allow removal of the ignition key while the engine is running, leading to a possible rollaway, crash and injuries to people inside the vehicle and pedestrians.
Los Angeles Times
General Motors announced Thursday it will take a $1.3 billion write-down to cover the cost of repairs related to faulty ignition-switch recalls, and placed two engineers at the center of the recall scandal on paid leave.
The company also said it will replace a second part in the affected cars.
GM Chief Executive Mary Barra confirmed Thursday that two engineers were put on leave after a briefing from Anton Valukas, the former U.S. attorney overseeing an independent investigation into circumstances leading to a safety recall of 2.6 million GM cars because of a faulty ignition switch.
“This is an interim step as we seek the truth about what happened,” Barra said Thursday.
GM did not give specific reasons why the two engineers, widely reported to be Ray DeGiorgio and Gary Altman, were put on leave.
The defect causes vehicles to shut off, disabling the air bags and other key functions, and has been linked to 13 deaths. GM has known about the problem for more than a decade but did not recall the cars until earlier this year.
The auto company had already set aside $750 million to fix the cars with the bad switch, to provide owners loaner vehicles when requested, and to repair about 3.5 million other vehicles recalled this year for other problems.
Now GM said it will take a $1.3 billion charge against its first-quarter earnings to cover those expenses.
GM also has told the National Highway Traffic Safety Administration that it will replace the ignition lock cylinders in the 2.2 million cars recalled for the ignition-switch issue in the United States. The cylinders can allow removal of the ignition key while the engine is running, leading to a possible rollaway, GM said.
The car company said it knows of “several hundred complaints of keys coming out of ignitions. Searches of GM and government databases found one rollaway in a parking lot that resulted in a crash and one injury claim.”
Its research has not turned up any deaths associated with this second problem.
The expanded recall covers the 2003-2007 Saturn Ion, 2005-2010 Chevrolet Cobalt, 2006-2010 Pontiac Solstice, 2007-2010 Pontiac G5, 2007-2010 Saturn Sky and 2006-2011 Chevrolet HHR.