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GM knew for a decade; 124 died before the recall
GM's faulty ignition switches killed 124 people the company had known about since 2005 — the recall came in February 2014, after at least a decade.
General Motors · 2014-02-07
What happened
The ignition switch in the Chevrolet Cobalt and other small GM cars had a defect: its torque was below GM's own 10–20 N·cm standard, so a heavy keychain or a bump could knock it out of Run — cutting the engine, power steering and brakes, and disabling the airbags, which cannot fire without ignition power.
GM engineers knew about the problem and held meetings about it as early as 2005 — a lawsuit alleged knowledge since 2001 — yet the first recall did not come until 7 February 2014. It began with Cobalts and Pontiac G5s and ballooned to nearly 30 million cars worldwide by the end of that year.
GM's compensation fund acknowledged 124 deaths — the company had originally linked the defect to just 13 deaths and 31 crashes — and paid $600 million to victims' families. In September 2015 GM admitted wire fraud, failing to disclose the defect to NHTSA and misleading consumers, and paid $900 million under a deferred prosecution agreement plus a $35 million fine.
Why it happened
- The decision was the delay: engineers knew by 2005, and a decade of weighing recall costs against lawsuit costs shipped thousands of deadly cars — the truth erased $3 billion in shareholder value.
- GM's original accounting — 13 deaths, 31 crashes — treated the defect as small; its own compensation fund found 124 deaths, a tenfold gap that showed how the company measured risk.
- The failure was cultural, not technical: a switch that failed GM's own specification was built for years, and the people who knew did not decide — until prosecutors did, with a $900 million penalty.
The lesson
GM knew of the defect for a decade and recalled it only after 124 deaths were counted. The cost of a defect is not what the fix would have cost — it is the number of people who died while you decided.
Aftermath
The February 2014 recall grew through the year to nearly 30 million cars. GM's victim compensation fund approved 399 claims — 124 deaths and the rest injuries — out of applications it rejected more than 90 percent of, and paid $600 million; the company then paid $900 million to end the federal criminal case and $35 million to the Department of Transportation. Recalls and private lawsuits continued through 2015, and the episode became the standard case of a deadly defect hidden until it was too late.
Sources
- Wikipedia — General Motors ignition switch recalls (defect below GM's own 10–20 N·cm spec; engineers met about it since 2005; first recall 7 February 2014; ~30M cars recalled; 124 deaths compensated; 399 approved claims of >90% rejected; $600M fund; $3B shareholder loss in four weeks; $900M DPA + $35M DOT fine)
- U.S. DOJ — Manhattan U.S. Attorney announces criminal charges against General Motors and deferred prosecution agreement with $900 million forfeiture, 17 September 2015 (wire fraud; the defective switch concealed from NHTSA, spring 2012–February 2014; GM misled consumers; GM had acknowledged 15 deaths)
- BBC News — GM agrees $900m settlement for faulty ignition switches, 17 September 2015 (wire fraud admission; failure to disclose to NHTSA; staff knew for more than a decade; 2.6M cars recalled from February 2014, nearly 30M by end of 2014; more than 100 confirmed deaths)
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