Businesses constantly lobby to reduce government regulation, but the unfolding debacle at General Motors is a reminder that industry can't always be trusted to do what it should to protect its customers. GM chief executive Mary Barra has issued an apology for the deaths that occurred after the company failed to recall small cars for a part it knew was defective 10 years ago. But the National Highway Traffic Safety Administration also needs to re-examine how it failed to see the problem after three separate investigations. Both the free market and regulators failed American consumers.
This is when General Motors should have been doing a victory lap. It has emerged from bankruptcy, repaid government loans and installed its first female chief executive. But instead the company finds itself in the middle of a growing controversy. GM last month finally ordered a recall of cars with faulty ignition switches that shut down engines and kept air bags from deploying — but not until the defect had been linked to at least 12 deaths, and possibly many more. As the New York Times reported, a report for the Center for Auto Safety conducted by Friedman Research Corp. suggests that 303 people died in two of the recalled models in crashes in which air bags failed to deploy. GM has also recalled another 1.7 million cars this week for a variety of safety concerns.
GM now acknowledges it first learned of problems with the ignition switches on its Cobalt line of cars in 2004. Over the next decade, GM's engineers confirmed the problem on the Cobalt and other product lines, including the Saturn Ion, Pontiac G5 and Chevrolet HHR. GM filed reports of product failures with federal safety regulators. But neither the company's engineers nor the federal safety experts connected the dots until last fall when GM's engineers finally uncovered the source of the ignition switch problems.
Now Barra has ordered a comprehensive internal safety review, issued the additional recall and is preparing for congressional hearings. GM says the combined recalls and repairs will cost the company nearly $300 million. It should also expect a torrent of private lawsuits. The Justice Department has launched an investigation to ascertain if GM broke any laws.
But GM isn't the only one that needs to review. NHTSA, the traffic safety agency, needs to explain what steps it will take to keep closer watch on automaker defects and responses. In this case, the agency failed to act despite numerous complaints and two investigations into fatal accidents involving 2005 Chevy Cobalts in which the ignition switch had switched from "run" to "accessory," causing the engine to shut off or the air bags not to deploy. An investigation into a third fatal accident in a different model also found the engine had shut off.
Hopefully, GM has learned a lesson and won't drag its heels on future recalls. But consumers can't count on that, and there is a clear need to reinvigorate auto regulation. Americans should be able to trust that their government demands that major automakers, particularly one that has benefited so much from public goodwill in recent years, meet safety standards.