U.S. to Drop Recall Probe of GM Trucks
In an unprecedented settlement decried by consumer activists, the U.S. government agreed Friday to drop a recall investigation of 5 million General Motors pickup trucks in exchange for a $51-million contribution from the company for safety programs.
Transportation Secretary Federico Pena said he would abandon his earlier ruling that GM’s 1973-87 C/K pickup trucks had a safety defect because the agreement would avoid costly litigation and enhance safety programs that could immediately save lives.
“This settlement is a common sense outcome and a victory for safety,” Pena said at a news conference in Washington.
But consumer groups, which prompted the government’s safety investigation of the vehicles in 1992, harshly criticized the agreement as “unprincipled and irresponsible.”
“A multibillion-dollar conglomerate has essentially bought the government’s silence for a pittance,” said Joan Claybrook, president of Public Citizen and a former administrator of the National Highway Traffic Safety Administration under President Jimmy Carter.
She said her group and the Center for Auto Safety, another consumer advocacy group, is considering challenging the agreement in court on behalf of crash victims and their families.
Pena’s announcement was a surprising twist in an increasingly bitter and emotional battle over the pickups’ safety that began in 1992. It came just four days before a NHTSA public meeting on a potential recall, which could have been the largest and most expensive in the nation’s history. The meeting was canceled.
On Oct. 17, Pena made an initial ruling that GM pickups were defective and presented an “unreasonable risk” to consumers because their design made them more susceptible to fires in side-impact collisions. The vehicle’s fuel tanks are mounted on the side outside the protective frame.
GM has adamantly maintained that the C/K pickups, sold under Chevrolet and GMC nameplates, are safe and meet all federal safety standards, including those for side-impact collisions. The pickups also have a better overall safety record than most passenger cars, company and government officials said.
“Our position has never wavered that these trucks are not unsafe and do not pose an unreasonable risk to owners who continue to operate them,” said GM spokesman Ed Lechtzin.
A recall could have cost GM more than $1 billion, and the company had vowed to fight the case to the U.S. Supreme Court if necessary.
Pena said the settlement was the best option presented to him. If a recall was ordered, the matter would have gone to court and the vehicles would have remained on the road until the case was resolved in five to seven years, he said. If the case was closed, the public would have gotten no benefit.
“Given the options, I decided this kind of agreement was most in the best interest of the public,” Pena said.
Pena termed the settlement unique, and safety experts said there has been no other case in which federal regulators had agreed to vacate a recall investigation in return for a corporate donation and cooperation in unrelated safety activities.
The agreement, which was signed by Pena and GM Chief Executive John F. Smith, requires the auto maker to contribute $51 million to a variety of programs identified by NHTSA. The contribution can be in the form of money, facilities or labor, but must be new expenditures not already budgeted by GM.
The agreement calls for GM to cooperate in developing stronger federal side-impact collision standards for fuel systems. The current standard requires gas tanks to withstand a 20 m.p.h. crash. The government would like the threshold doubled to 40 m.p.h. to better mirror real-world conditions.
The auto maker also will help fund a government fire safety research laboratory, contribute to research for burn and trauma victims, crash tests dummies and drunk-driving, and expend $8 million for child-safety seats for low-income families.
“These programs will save hundreds of lives and prevent thousands of injuries,” said Pena.
In making his initial determination of defect, Pena said 150 people had died in fiery collisions in the C/K pickups and 32 more would die in subsequent years. He said GM had made a design decision placing “sales over safety.” Although the company altered the design in 1988, placing the gas tank within the body frame, Pena said there was evidence that GM knew of the problem in the early 1970s.
Pena’s initial recall decision came under fire in recent weeks when it was revealed that it was made against the recommendation of NHTSA’s technical staff.
Charles Gauthier, former director of NHTSA’s office of defect investigation, said the staff found the C/K pickups do have a greater risk of fire-related fatalities when compared to other similar trucks--but not an “unreasonable risk” when compared to all cars and trucks.
“We recommended that the defect investigation be closed,” said Gauthier, who recently retired after 21 years with NHTSA. He added that the staff then was taken out of the loop and the decision was placed in the hands of political appointees.
The Big Three and foreign auto makers complained about the initial recall decision in letters to President Clinton, asking him to intervene. Pena said that he advised the Administration of Friday’s settlement but had no other contact with the White House regarding the decision.
NHTSA began an investigation in December, 1992, shortly after the “Dateline NBC” news program aired a critical show that purported to show GM pickups erupting into flames when hit in the side. But GM proved that NBC rigged the crash tests and the network retracted the story.
In early 1993, the company was rocked when a Georgia jury awarded $105 million to the parents of 17-year-old Shannon Moseley, who died when his C/K pickup burst into flames after being hit in the side. An appeals court overturned the decision in June and sent it back to the lower court for retrial.
GM faces more than 50 product-liability cases involving fire-related deaths and injuries in C/K pickups. It feared that the Dec. 6 public meeting would have provided a podium for trial lawyers to parade burn victims before the public. Claybrook said the victims still plan their own news conference in Washington on Monday.
B.J. Kincade, who heads a victims’ recall group, characterized the settlement as a corporate payoff that “amounts to nothing more than a sentence of death” to drivers of these trucks.
Case Dates to 1972
The following is a chronology of key events in the dispute between General Motors Corp. and the U.S. Department of Transportation over the safety of GM’s full-sized pickup trucks.
1972: GM begins production of the C/K pickup truck, with the fuel tanks located outside the vehicle’s frame rails.
February, 1992: GM settles a lawsuit with the family of a 61-year-old GM worker who died in a fire in a 1987 pickup truck.
November, 1992: NBC’s “Dateline” broadcasts a report on GM pickup trucks that featured a “simulated crash” of a GM truck. The truck burst into flames. GM claims the explosion was rigged. NBC later apologizes for the report.
December, 1992: National Highway Traffic Safety Administration formerly begins an investigation into GM trucks equipped with the so-called side-saddle fuel tanks.
February, 1993: An Atlanta jury orders GM to pay $105.2 million to the parents of 17-year-old Shannon Moseley, who died in a 1989 crash. The verdict is later thrown out on appeal. The Moseleys are appealing the decision.
April, 1993: NHTSA asks GM to recall the vehicles and launches an engineering analysis.
October, 1993: GM enters into a class-action settlement with full-sized pickup truck owners. The settlement offers owners $1,000 in coupons toward the purchase of a new GM truck to compensate customers who claimed negative publicity had hurt their vehicles’ resale values.
October, 1994: Department of Transportation schedules a public hearing for Dec. 6 to collect additional information on the defects.
Dec. 2, 1994: Under a settlement agreement, GM pledges to spend $51.36 million to set up an auto safety fund.
