GM ordered 500,000 ignition switches before recall
Washington — General Motors Co. ordered more than 500,000 replacement ignition switches in December, launching an "urgent" request six weeks before it began a recall for older Chevrolet Cobalt cars now linked to 32 deaths and 31 injuries.
The move — while not unusual in the auto industry — raises questions about why the Detroit automaker did not immediately issue a formal recall in December. The revelation is in 36 pages of emails disclosed by Delphi Automotive, the British auto supplier with its U.S. headquarters in Troy, and shows more details of GM's actions ahead of the recall that began in late January and was announced publicly in February for about 700,000 vehicles. It was eventually expanded to about 2.6 million Cobalts, Saturn Ions and other small cars.
"Per the voicemail I just left you, I am looking for a build and ship plan for a large volume of this part to support an urgent Field Action for our customers," wrote GM contractor Sarah Missentzis on Dec. 18 to Delphi. "I will need to secure a total of 500,000 pcs, at this time. I am not sure if you have any stock you can provide prior to the holiday break or not, please let me know so I can make the manual adds to the system to accommodate."
The Justice Department is investigating GM's handling of the delayed ignition switch recall. The Securities and Exchange Commission, 48 state attorneys general and Canadian officials are also investigating.
GM paid a record-setting $35 million fine to the National Highway Traffic Safety Administration in May for delaying its ignition recall and agreed to up to three years of intense monitoring by NHTSA.
Bob Hilliard, lead attorney for the personal injury and wrongful death plaintiffs against GM related to the ignition switch defects, disclosed the emails Monday and harshly criticized GM.
"After four congressional hearings, months and months of GM's public promises, now we learn for the first time that GM quietly and desperately ordered half a million replacement ignition switches on December 18, 2013 for what it labeled 'an urgent field action,'" Hilliard, a Texas attorney, said in a statement. "This is simply mind-blowing in its raw evilness."
The order wasn't mentioned by GM's internal investigation led by former U.S. attorney Anton Valukas into GM's handling of the recall — a fact that Hilliard raised questions about.
Hillaird said during the delay at least 85 crashes and one death occurred. GM has said there are no confirmed deaths since December.
GM, in a statement released Monday, said the emails confirm GM's system needed reform and that it has done so.
"We have reorganized our entire safety investigation and decision process and have more investigators, move issues more quickly and make decisions with better data," GM said.
Under new changes, when there is a potential issue appropriate data helps determine whether more investigation is needed. Then, an investigation review recommends for or against a recall or other field action and a group of senior leaders "quickly decides whether or not recall is warranted."
Delphi did not respond for requests for comment.
"GM was clearly scrambling and, at the same time, intentionally concealing. GM labeled the order 'urgent' and told their supplier to ship ASAP and to use an 'aggressive schedule," Hilliard said in a statement. "GM should have notified its customers immediately to take all weight off of their key chains. By the time GM actually ordered these parts, it had to have already spent months making the decision to place the order."
Three top GM leaders met on Dec. 17 to consider the Cobalt issue including now retired Vice President of Engineering John Calabrese, Alicia Boler-Davis, senior vice president of global quality and customer experience and Gerald Johnson, then vice president of manufacturing. They all had to be in agreement in order to issue a recall.
There were no notes or minutes taken, according to the Valukas report. Calabrese attended in person, while Boler-Davis sent another GM staffer, Jeffrey Wrona, to attend for her and it is believed Johnson did not attend, according to the report.
A day before the meeting, the committee members received a PowerPoint slide that did not indicate any information on deaths or the length of the investigation. Calabrese was "dissatisfied with the evidentiary support" given during the meeting and raised questions he thought required more analysis before a recall decision could be made including GM engineers having not identified a cause of why air bags weren't deploying, according to the report. The meeting ended without a decision.
In a Dec. 19 email, a GM contractor explains the reason for the massive order.
"It is a huge increase. It is to support a Field Action for large vehicle population," wrote Missentzis. "I would need to start seeing shipments ASAP. Please put together and aggressive plan and I can adjust the schedule accordingly."
Delphi documents say GM was planning a "field fix" for 700,000 vehicles as early as Dec. 20.
Delphi priced the replacement switches at about $5 each. Delphi told GM the rushed order would "have some significant expediting, OT, and tooling charges associated with the plan."
By Jan. 15, the GM contractor was pushing for faster action.
"I left you another message. Please get back with me today with your ship plan. Please understand that we have to be able to provide timing and see what we can do to improve it. Delphi was notified of this urgent issue before Christmas and I have yet to see a plan. Please get me something by 4 PM today!!" Missentzis wrote.
On Jan. 21, Delphi said it would take at least 17 weeks to produce enough parts and needed $390,000 to start the process to build the parts tooling and for overtime.
"You can see from the attached we can get to 30,000 units per week if we duplicate our bottleneck process," wrote Delphi's Susan Dowling. "If not, 15,000 pieces per week (with overtime). The largest cost is for the circuit board and is required regardless. The supplier is in China and they will begin their New Year holiday next week, so the sooner we can get this kicked off, we can avoid the delay of their holiday. They are willing to work through it, but we need to have them kicked off."
By contrast, Delphi had only produced about 11,000 replacement switches in the year before the request for the big increase.
The emails also show Delphi was confused by the fact — later disclosed — that GM failed to change the ignition switch part number.
"Our records show a receipt in July 2006, and then no other shipments or receipts until January 2009! Do you know if there was a different part number shipped for this vehicle usage between 2006 and 2009? We are very puzzled why there is a three-year gap in shipments of PN 10392423. My engineering file doesn't show any part number change history either," Delphi wrote.
GM came under harsh criticism from Congress for improving the ignition switch and failing to change the part number. GM CEO Mary Barra called the practice unacceptable.
Sen. Richard Blumenthal, D-Conn., said in a Detroit News interview on Monday that the new emails "raise serious questions about the timeline of GM's recall actions."
Barra has said she first learned of the ignition switch issue in late December. GM declined to answer on Monday if Barra knew about the order of 500,000 parts.
"A 500,000 part order is hardly routine so there is front center the questions of who knew about it and how high in the organization and when," Blumenthal said, saying he wants Congress to hold more hearings. The order of parts for "an essential safety part of the car should have been a noteworthy issue and raised alarm within GM."
The emails "powerfully reinforce the need for fundamental far reaching reform" on auto safety."
GM shares fell sharply on the disclosures and were down 2.2 percent, or $0.67 a share, in early trading to $30.92.
Asked if Barra knew about the 500,000 parts order, GM spokesman Alan Adler said Barra has testified she didn't learn of the recall until Jan. 31, but he didn't answer if she had learned of the parts order before then.
The emails were reported earlier by the Wall Street Journal.