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Continental Automotive Named in General Motors Recall Suit

A unit of Continental AG (CON), the German auto parts maker, was accused in a lawsuit of supplying defective airbag systems for General Motors Co. (GM) vehicles recalled because of ignition-switch flaws.

The complaint is the first among the dozens of lawsuits filed over General Motor’s recall of 2.59 million Chevrolet Cobalts, Saturn Ions and other models, that names Continental Automotive Systems U.S. as a defendant. The lawsuit in federal court in Santa Ana, California, was brought by 25 buyers of GM cars who seek to represent a nationwide class of customers.

Adding Continental to the litigation against the largest U.S. automaker creates an alternative avenue for plaintiffs to seek damages because GM’s 2009 bankruptcy reorganization may shield the carmaker from liability for the claims. Customers argue they wouldn’t have paid as much as they did for the cars or not bought them at all if they had known about the defects.

“The new filing adds Continental as a defendant because it appears that Continental was also aware of the ignition switch defect in GM cars as early as 2005, when GM met with Continental in the investigation of a crash of a 2005 Chevrolet Cobalt,”” Adam Levitt, a lawyer for the GM buyers suing, said in an e-mailed statement.

The ignition-related recalls involve a defect that can cause the switch to shut off, which in turn can cause the engine to stall and the car’s airbags to be deactivated. At least 13 deaths have been linked to the defect.

Kathryn Blackwell, a spokeswoman for Continental in Auburn Hills, Michigan, said she couldn’t immediately comment as the company hasn’t been served with the lawsuit.

Greg Martin, a spokesman for Detroit-based GM, which is also a defendant, declined to comment.

Continental’s American depositary receipts rose 66 cents, or 2 percent, to $47.65. GM climbed 1 cent to $33.98 in New York trading.

The case is Saclo v. General Motors LLC, 14-cv-00604, U.S. District Court, Central District of California (Santa Ana). ”

To contact the reporter on this story: Edvard Pettersson in Federal court in Los Angeles at

epettersson@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Peter Blumberg, Joe Schneider

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