April 10, 2014 at 1:00 am

GM knew of latest defect for years

People walk near the front entrance of the General Motors headquarters in Detroit. (Joshua Lott / Getty Images)

General Motors Co. issued Thursday a second recall for 2.59 million faulty Saturn Ions, Chevrolet Cobalts and similar cars, this time for a defective ignition-lock cylinder the carmaker also has known about for nearly a decade.

The company also said it is upping its first-quarter charge on the recalls and rental cars to $1.3 billion from the earlier $750 million.

GM said it knows of several hundred complaints of keys coming out of the slot of the ignition-lock cylinder while the engine is still running. The automaker received its first complaint about the problem in 2005 and replaced cylinders for free in more than 250,000 cars in customer-satisfaction programs beginning in November 2010 and April 2012, GM spokesman Kevin Kelly said.

The company said a search of GM and government databases found a single roll-away crash in a parking lot that injured one person, but knows of no fatalities tied to the ignition-lock cylinder problem.

The company said the cars in the latest recall include: 2003-07 Ion, 2005-10 Cobalt, 2006-10 Pontiac Solstice, 2007-10 Pontiac G5, 2007-10 Saturn Sky and 2006-11 Chevrolet HHR. Those cars are the same ones that were recalled in February and March for bad ignition switches that are tied to 13 deaths. The earlier recalls were made because heavy key rings could accidentally turn the weak ignition switches, killing the engine and disabling power steering and air bags.

The new recall means GM has recalled 9.6 million vehicles this year worldwide, though 2.59 million of those were recalled twice.

The ignition-lock cylinder is a separate component of the overall ignition switch assembly and would not be remedied by the replacement parts that are to begin arriving at dealers Friday.

GM is hoping customers will be able to get both parts fixed at the same time; it has placed more than 22,000 people into rental cars and those people may be the first to receive a call from dealers that parts are available.

“We’re planning to ship the parts together,” Kelly said. “We’re planning to ship them as a kit so the customer will only come in for one visit.”

Kelly said it has a “good supply” of lock cylinders in stock, but declined to provide a figure. “We don’t expect there to be much of a delay,” he said.

New recall precautions

As a result of the first recalls, the automaker told owners to remove all keys from key rings except the ignition key until repairs can be made. With the new recall announced Thursday, GM warns drivers of recalled cars with automatic transmissions to shift to “park” before removing the key. Those with manual transmissions should make sure the ignition switch is “off,” the stick shift is in “reverse” and the parking brake is set before removing the key.

Ignition switch parts are expected to arrive at dealers Friday and the new recall won’t delay a start in fixing that part, GM spokesman Greg Martin said.

Todd McCallum, fixed operations director for LaFontaine Automotive Group which has three GM dealerships in Highland Township, Dexter and Ann Arbor, said none of his locations had ignition switch parts Thursday; he expects it may be next week before any arrive.

He said GM dealer representatives told LaFontaine earlier this week to fix ignition-lock cylinders on vehicles if customers said they had a problem. McCallum said the dealerships have about 90 cars parked on lots awaiting repair. He said only a few complained about ignition-lock cylinders.

McCallum said LaFontaine did not have information from GM on the new recall or its plans to ship parts together.

“It makes sense,” he said. “It would save time and save the customer from returning.”

McCallum said service technicians will have to take apart the cylinder component to fix the ignition switch. He said the new recall should not add extra repair time for the customer.

Cylinder supplier changed

GM changed suppliers on the ignition-lock cylinder from Ortech to Strattec Security Corp. in Milwaukee. Kelly said he didn’t know when GM made the change and The Detroit News could not reach officials from Strattec for comment.

But a GM engineer, in an April 2013 deposition, said the automaker had issues with Ortech and switched suppliers in 2008 or 2009. David Thrush, who was deposed as part of a lawsuit filed against GM on behalf of the family of Brooke Melton who died in a 2005 Cobalt, said the company had “supplier quality issues” with Ortech and switched to Strattec.

“Inside the cylinder, there’s pieces that are manufactured or machined. They had issues where they couldn’t machine them properly, or they could machine them properly, but not at the rate that we needed,” said Thrush, who said he was lead engineer in the design of the ignition cylinder and key on the 2005 Cobalt. “So we had some quality issues where the cylinders weren’t functioning exactly the way it should have been.”

Thrush recalled in the deposition that GM had customer complaints of drivers putting the key in the ignition and not being able to rotate from “off,” so they couldn’t start their cars. He said he thought GM had issued a technical service bulletin between 2003 and 2005 to replace ignition-lock cylinders for customers having that problem.

Thrush also testified he knew of complaints that the key could be taken from the cylinder when the key was not in the “off” position. GM in 2010 introduced a new key for the Cobalt.

GM made the decision to recall the vehicles for faulty ignition-lock cylinders on April 3, according to its filing with the National Highway Traffic Safety Administration.

The automaker will file a detailed chronology of how it decided this recall in the coming weeks.

Wall Street investors shrugged off the latest bad news. GM stock briefly rose Thursday as the automakerreassured investors it still expected to report “solid core operating performance in the first-quarter financial results.” As the broader market tumbled, GM stock fell 20 cents to $33.42, its lowest level since late June.

David Kudla, CEO of Mainstay Capital Management in Grand Blanc, said GM’s warning on earnings shows the company wants to get in front of the problem. “There was a lot going on in the market today, but GM’s stock was largely unaffected by this,” he said. “It’s been priced into the stock already.”

Barclays estimates GM earned just 20 cents a share in the first quarter and earnings before interest and taxes totaled $437 million, “which would represent the worst quarterly result for GM since fourth-quarter 2009.”

Standard & Poor’s Ratings Services on Thursday said GM’s recalls don’t have an immediate impact on GM’s ratings with the ratings agency.

mburden@detroitnews.com
Staff Writers Bryce G. Hoffman and Karl Henkel contributed.