This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Safety Agency Missed Cobalt Clues

By Dee-Ann Durbin and Tom Krisher

DETROIT -- For years, the U.S. government's auto safety watchdog sent form letters to worried owners of the Chevrolet Cobalt and other General Motors (GM - Get Report) small cars, saying it didn't have enough information about problems with unexpected stalling to establish a trend or open an investigation.

The data tell a different story.

An Associated Press review of complaints to the National Highway Traffic Safety Administration shows that over a nine-year period, 164 drivers reported that their 2005 to 2007 Chevrolet Cobalts stalled without warning. That was far more than any of the car's competitors from the same model years, except for the Toyota (TM) Corolla, which was recalled after a government investigation in 2010.

Must Read: After Sandy, Feds Mull Plan for Artificial Islands

Stalling was one sign of the ignition switch failure that led GM last month to recall 1.6 million Cobalts and other compact cars, including the Saturn Ion, Pontiac G5 and Chevrolet HHR. Another 971,000 cars from model years 2008 to 2011 were recalled late Friday to find faulty replacement switches, bringing the total to about 2.6 million.

GM has linked the problem to at least 13 deaths and dozens of crashes. The company says the switch can slip out of the "run" position, which causes the engine to stall. This knocks out the power steering and power-assisted brakes, making the car harder to maneuver. Power to the device that activates the air bags is also cut off.

GM has recently acknowledged it knew the switch was defective at least a decade ago, and the government started receiving complaints about the 2005 Cobalt just months after it went on sale. House and Senate subcommittees have called the current heads of the automaker and NHTSA to testify on April 1 and 2 about why it took so long for owners to be told there was a potentially deadly defect in their cars.

Although the overall number of complaints represents only 0.02% of the nearly 625,000 Cobalts sold from 2005 to 2007 in the U.S., experts familiar with NHTSA say they were enough to warrant an investigation and recall. The Cobalt had about the same rate of complaints as the Corolla. And the agency knew of at least two fatalities in Cobalt crashes that involved a sudden stall when it first declined to investigate the cars in 2007.

Spotting trends in the tens of thousands of complaints NHTSA gets each year is a tough job, and this case may have been more complicated than most. The Cobalt had a litany of problems, including fuel leaks, and a power steering defect that the agency did investigate. GM may not have disclosed all the information it had on the switches. And much of the government's attention was claimed by the 2010 recall of millions of Toyotas for unintended acceleration.

But several experts say NHTSA should have pressed for a recall sooner.

"They're not connecting up the dots. That's the generous explanation," says Clarence Ditlow, executive director of the Washington-based Center for Auto Safety, who has studied the government's auto safety agency for decades. "The not-so-generous is that they did connect the dots but they just didn't do anything."

U.S. Transportation Secretary Anthony Foxx, whose department oversees auto safety, has asked for an internal investigation into the GM issue. In a letter calling for the probe, Foxx said he is unaware of information that NHTSA "failed to properly carry out its safety mission based on the data available to it and the processes followed."

The safety agency, in a statement provided to the AP, said that during the past seven years, its investigations have brought 929 recalls of more than 55 million vehicles. "Each potential recall investigation is unique and dependent on the data gathered in each case," it said.

Foxx has said that GM didn't give the government enough information on the defective switches. In papers submitted to the safety agency last month, GM says engineers proposed solutions to the problem in early 2005, but the company didn't take action, developments unknown to the safety agency at the time. But the AP analysis makes clear that even without that information, NHTSA had evidence in 2005 that the switches were a problem.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
GM $29.00 0.00%
AAPL $113.29 0.00%
FB $91.01 0.00%
GOOG $630.38 0.00%
TSLA $248.48 0.00%

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs