NEWS ANALYSIS : Bargaining Likely Between GM, Safety Agency : Autos: Both sides may seek to save face in the battle over sidesaddle fuel tanks. Meanwhile, lawyers are lining up plaintiffs in dozens of states.
General Motors Corp.’s resistance of a government request that it recall 4.7 million of its older pickup trucks indicates the auto maker will stand by claims that the trucks are as safe as any built in the 1970s and ‘80s.
But between now and April 30, when GM must formally respond to the National Highway Traffic Safety Administration, there is likely to be some hard bargaining between the auto maker and the government agency.
The goal: finding a way for both sides to save face.
Even if a compromise can be worked out regarding the placement of fuel tanks outside the frame rails on GM’s 1973-87 full-size pickups, the legal atmosphere is still highly charged. Attorneys are lining up truck owners to sue GM in dozens of states.
Analysts say that unless a settlement protects GM from being repeatedly dragged into court over the issue, the auto maker must fight the government--even if that means alienating customers and investors and chancing months or years of more negative publicity.
Critics say 300 people have died in GM pickups because the so-called sidesaddle tanks have a greater risk of exploding in side-impact crashes than comparable models.
“My view would be if they can engineer a way whereby they can recall this vehicle and be absolved of any future liabilities, do it,” said Lehman Brothers analyst Joseph Phillippi. “But they’re really in a Catch-22. There’s no way out of this.”
The same appears to be true for the NHTSA.
In requesting a recall, the agency echoed consumer advocates’ claims that GM’s older trucks are 2.4 times more likely to explode in a side-impact crash that results in a fire than Ford Motor Co. pickups, and 3.5 times more likely than comparable Dodge pickups.
But in citing a possible safety defect in the GM trucks, the government appears to be selectively enforcing its 1977 safety standards on side-impact crashes, which the auto maker and the NHTSA agree the GM trucks met. The standard required that no fuel leak from the gas tank in a 20-m.p.h. side impact.
Consumer safety groups, many of which GM claims get their money from trial lawyers seeking to make millions by defeating the company in court, have kept the issue alive, staging frequent news conferences in Washington.
“There’s been a very serious, persistent effort by plaintiff attorney-backed individuals or groups, some posing as safety advocates, to force this out of the technical arena and into the emotional and hysterical,” said William O’Neill, director of public affairs for GM’s North American operations.
GM has aggressively countered many of the claims, including its February offensive against an expose by the NBC News program “Dateline.”
In a 15-minute segment that aired in November, “Dateline” simulated a side-impact collision that resulted in the explosion of a GM truck. But NBC failed to tell its audience that toy rocket engines had been taped to the underside of the truck to increase the chance of an explosion.
GM says its response in the NBC matter addressed journalism ethics more than fuel tank safety.
GM is facing at least 28 lawsuits over the tank placement, many seeking to have all owners in a certain state or federal district included in a class action.
Separately, the auto maker is appealing an Atlanta jury’s award in February of $105 million to the family of a teen-ager who died while driving a 1985 GMC full-size pickup. The truck exploded after being sideswiped.
Throughout the months of controversy over the trucks, GM has said the safety issue should properly be resolved by the government.
But GM was blindsided Friday by a three-page letter from William A. Boehly, the NHTSA’s top enforcement official, requesting a recall that the auto maker thought was weeks, if not months, away.
The government request is far from the final word in the controversy. If GM refuses a voluntary recall, the NHTSA can issue a preliminary finding of a safety defect, hold a public hearing and follow with a final safety defect ruling and issue a recall order.
GM could fight the order in court, or the NHTSA could back off at any point along the way.
“I think in the end they’re going to strike a deal of some sort . . . that makes both sides look like they’re doing the right thing,” said Wertheim Schroder & Co. analyst John Casesa.
