GM saved about $1 per car by refusing to replace ignitions

Newly-released documents show General Motors refused to change the faulty ignition switches found in many of its cars to avoid adding less than a dollar onto the cost of each vehicle.

Members of Congress cited those documents while grilling General Motors CEO Mary Barra about the company's failure to recall millions of cars when it first noticed the ignition defect more than ten years ago. (Via CNN)

"In one case saying that the amount that the company would save in warranty costs, only about 10 to 15 cents per switch, was not as much as the 90 cents per switch it would cost to make the change." (Via PBS)

The Wall Street Journal obtained a copy of the email from Sept. 2005 in which a General Motors official estimated the price of a new switch would cost the company too much money.

When the Senate committee showed Barra the email, she said she was "deeply sorry" for what she called General Motors' "cost culture" in the past.

"When GM concluded, and you heard in my opening statement, that the tooling cost and price pieces are too high, what does that mean?"

"I find that statement to be very disturbing." (Via Al Jazeera)

General Motors says, if the faulty ignitions are bumped or prodded in the wrong way, they can switch out of "Run" mode even while the car is being driven. This shuts the engine off and shuts down power brakes, power steering and airbags.

According to CNN, the defective ignition switch has been connected to at least 13 deaths and more than 30 crashes in the past nine years.

But Barra, who became CEO back in January, said during the hearing she promises new changes at General Motors will prevent something like this from happening ever again.

"We think the situation is tragic. We're deeply sorry. We apologize for what's happened. It is inconceivable, it is not our process and it is not acceptable." (Via CBS)

Barra will undergo more questioning from a Senate subcommittee Wednesday morning.

Print this article Back to Top

Comments
Your Region News
West Valley Phoenix Metro Southeast Valley Northeast Valley Northern Arizona Central/Southern AZ