GM's Recall Nightmare - kcentv.com - KCEN HD - Waco, Temple, and Killeen

GM's Recall Nightmare

Posted: Updated:

(CNN) -- Those five years had been good for the "New GM." It recaptured lost market share. It made record profits. And it won praise for the quality of its cars from both critics and buyers.

Then on Feb. 14, GM announced a recall of about 800,000 cars due to an ignition switch problem that could cause the cars to shut off while being driven.

It has been engulfed by the recall crisis ever since.

The company's problems have snowballed. GM ultimately recalled 2.6 million cars worldwide for the flawed ignition switch that's been tied to at least 13 deaths. And GM admitted that its employees knew of the problem at least a decade before the recall.

Recalls hit a record: GM has issued more recalls this year than ever before. There have been 29 separate recalls covering 13.8 million U.S. cars and trucks, and at least 15.6 million vehicles worldwide.

The surge is the result of new standards at GM. The automaker says it's issuing recalls more quickly when reports of problems emerge. And it's also looking back at problems reported in the past that didn't prompt a recall to see whether one would be warranted under these new standards.

GM named a new safety chief and also hired 35 additional investigators to follow up on reports of problems.

The company is going to great lengths to show how serious it's taking matters. Last week GM called the owners of 477 trucks, including Silverados, Sierras and Tahoe SUVs to tell them to immediately stop driving the vehicles, which have a steering problem. GM sent flatbeds to pick up the trucks and have them repaired.

Scrutiny mounts: So far GM has agreed to pay the maximum fine of $35 million to theNational Highway Traffic Safety Administration for the delay in the ignition recall. And it will be subject to closer oversight by the regulator.

The Justice Department is also considering whether to bring criminal charges against the automaker. A similar probe over Toyota's 2009 and 2010 unintended acceleration recalls led to a $1.2 billion fine earlier this year.

GM CEO Mary Barra, who in January became the first woman to lead a major automaker, testified before Congress for two days in April. She faced harsh questions from lawmakers who argued the company is criminally liable.

The company isn't legally responsible for injuries or deaths that occurred before its 2009 bankruptcy, and most of the deaths tied to the ignition recall did take place before the filing. But the company has hired compensation expert Kenneth Feinberg, who worked with victims of 9/11 and the BP oil spill, to determine how to pay victims of the delayed recall.

Despite the legal protections it gained in bankruptcy, the automaker is facing dozens of recall-related civil lawsuits.

Profits wiped out: The company estimates it will cost $1.7 billion to repair the cars recalled so far in 2014. That expense essentially erased the profit the company would have reported in the first quarter.

And that only covers the cost of actually making repairs, and not any civil or criminal fines it may have to pay to victims or the government.

GM shares are down 18% this year, lagging far behind rivals Toyota and Ford Motor.

Car buyers don't care: The good news for GM is that car buyers have shown little concern about the recalls. New car sales have been strong in the three months since the ignition recall was announced, and the automaker is still No. 1 in U.S. market share. Even the price of used GM autos have stayed firm throughout the crisis.

  • Latest NewsMore>>

  • Facebook Post Leads Local Man Who Found Bracelet to Soldier Who Lost it Two Years Ago

    Facebook Post Leads Local Man Who Found Bracelet to Soldier Who Lost it Two Years Ago

    Friday, July 25 2014 11:13 PM EDT2014-07-26 03:13:21 GMT
    (KCEN) -- Call it a miracle, call it coincidence -- whatever you call it, it's an amazing story. A local man found a bracelet over the weekend memorializing two soldiers killed in action. A little legwork, and the bracelet that went missing two years ago is now on its way back to its owner, more than 1,200 miles away.More >>
    (KCEN) -- Call it a miracle, call it coincidence -- whatever you call it, it's an amazing story. A local man found a bracelet over the weekend memorializing two soldiers killed in action. A little legwork, and the bracelet that went missing two years ago is now on its way back to its owner, more than 1,200 miles away.
    More >>
  • Bell County Sheriff Eddy Lange Cleared in Lawsuit

    Bell County Sheriff Eddy Lange Cleared in Lawsuit

    Friday, July 25 2014 10:38 PM EDT2014-07-26 02:38:13 GMT
    (BELL COUNTY) -- A judge ruled in favor of Bell County Sheriff Eddy Lange in a lawsuit that claimed he violated the first amendment rights of two of his deputies.The suit was filled in 2013 by former Bell Co. Sheriff's Deputies Charles Grogan and Mary Farley.In the lawsuit, they claimed Sheriff Lange demoted them because they supported his political opponent in the republican primary.KCEN-HD's Emily Collins obtained the lawsuit Friday afternoon. We will continue to update this story.More >>
    (BELL COUNTY) -- A judge ruled in favor of Bell County Sheriff Eddy Lange in a lawsuit that claimed he violated the first amendment rights of two of his deputies.The suit was filled in 2013 by former Bell Co. Sheriff's Deputies Charles Grogan and Mary Farley.In the lawsuit, they claimed Sheriff Lange demoted them because they supported his political opponent in the republican primary.KCEN-HD's Emily Collins obtained the lawsuit Friday afternoon. We will continue to update this story.More >>
  • Ft. Hood Soldiers Help Finish Little Boy's 'Make a Wish'

    Ft. Hood Soldiers Help Finish Little Boy's 'Make a Wish'

    Friday, July 25 2014 7:01 PM EDT2014-07-25 23:01:18 GMT
    Ft. Hood soldiers help finish Antonio's greenhouseFt. Hood soldiers help finish Antonio's greenhouse
    (KCEN) – Even the toughest of soldiers cry once in a while, and get misty eyed when emotions get the best of them. Friday was one of those times. Around 10a.m. about 30 soldiers made their way to the Laguna’s home in Kempner, TX. Their mission: helping Make a Wish put the final touches on a little boy’s dream. “It’s what we do,” Sergeant Paulus Smallwood said. “If someone needs help we will go out and help them.” But it wasn’t just anyone. They were helping a fellow brother, Frank Laguna, wh...More >>
    (KCEN) – Even the toughest of soldiers cry once in a while, and get misty eyed when emotions get the best of them. Friday was one of those times. Around 10a.m. about 30 soldiers made their way to the Laguna’s home in Kempner, TX. Their mission: helping Make a Wish put the final touches on a little boy’s dream. “It’s what we do,” Sergeant Paulus Smallwood said. “If someone needs help we will go out and help them.” But it wasn’t just anyone. They were helping a fellow brother, Frank Laguna, wh...More >>
Click for Local Doppler Radar
Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and KCEN. All Rights Reserved. Users of this site agree to the Terms of Service, Privacy Notice/Your California Privacy Rights, and Ad Choices.