Bloomberg the Company

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Follow Us

Industry Products

GM Recall ‘Park-It’ Request Weighed by Judge in Texas

Don't Miss Out —
Follow us on:

April 4 (Bloomberg) -- A request for an unprecedented order to force General Motors Co. to tell drivers of 2.59 million recalled small cars to “park it” until faulty ignitions switches are fixed is being considered by a federal judge.

U.S. District Judge Nelva Gonzales Ramos, at a hearing today in Corpus Christi, Texas, is weighing what customers call a “fail-safe solution” to defects linked to 13 deaths, which they say make the cars too dangerous to drive until they’re fixed.

“No court has ever done what the plaintiffs are asking this court to do,” David Balser, a lawyer for GM, told the judge. He said the the order would also be unnecessary because replacement parts are on their way to dealers and repairs to recalled cars will begin next week.

The request for a park-it order was made by plaintiffs in a proposed class-action lawsuit seeking as much as $10 billion for the lost value of Chevrolet Cobalts and other small-car models recalled this year. The Detroit-based automaker is facing lawsuits by car owners or investors in Michigan and California, among other states, as well as lawsuits involving injuries and deaths as it seeks to address criticism it knew of the defect for at least a decade and failed to correct it.

Emergency Motion

Bob Hilliard, a lawyer for plaintiffs, said it was important for the court to act quickly because the National Highway Traffic Safety Administration has no authority to issue park-it alerts to recalled vehicle owners.

“We’re here on an emergency motion because this is an ongoing public safety issue,” Hilliard said.

“There’s no mechanism that can protect tomorrow’s victims but this court,” Hilliard said. Saying GM has said it will take until October to complete repairs on all the affected vehicles, he told the judge, “Between now and October, accidents will happen and there will be deaths.”

“What we’re asking is unprecedented, but it is allowed, and the court is allowed to do it to save lives,” he said.  

Balser said that about 13,000 GM customers are using free loaner cars, and 80 tests have shown that unweighted ignition keys are safe.

Ramos told the attorneys, “There are legal issues presented, and we’ll need to work through and address those.” She allowed the attorneys to present evidence at the hearing, while cautioning them the legal issues presented “raise concerns that we are operating quickly.”

‘Coverup’ Culture

GM Chief Executive Officer Mary Barra fielded pointed questions and accusations from Congress this week, with one senator saying GM had a “culture of coverup” and another predicting it may face criminal liability.

At a Senate hearing on the recall, U.S. Senator Richard Blumenthal asked Barra to warn drivers who were still “behind the wheel of those cars” that they shouldn’t drive them because they were unsafe.

Meeting at the company’s Washington offices with families of accident victims, Barra said the cars can still be driven safely, according to Hilliard, who organized the session.

GM has said it faces $750 million in first-quarter charges for recalls of almost 7 million vehicles, including repair costs for ignition and other faults.

The case is Silvas v. General Motors LLC, 14-cv-00089, U.S. District Court, Southern District of Texas (Corpus Christie).

To contact the reporters on this story: Laurel Calkins in federal court in Corpus Christi, Texas, at laurel@calkins.us.com; Linda Sandler in New York at lsandler@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Andrew Dunn at adunn8@bloomberg.net Mary Romano

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.