GM Argues Park-It Order Unneeded Because Recalled Cars Are Safe

Apr 10, 2014 12:05 am ET

April 10 (Bloomberg) -- General Motors Co. said it shouldn’t be forced to tell car owners to park models with faulty ignition switches until they are fixed because they’re safe to drive if government-approved recall instructions are followed.

U.S. District Judge Nelva Gonzales Ramos in Corpus Christi, Texas, asked GM to explain why she shouldn’t order the automaker to recommend that drivers of 2.59 million recalled small cars take them off the road.

GM, which knew of the defect for at least a decade and failed to correct it, faces at least 15 federal court lawsuits over the ignition switches, as well as probes by Congress and the National Highway Traffic Safety Administration.

This year, GM has already recalled more vehicles, 6.07 million, than any other automaker did in the U.S. in all of 2013 or 2012. GM has said it faces $750 million in first-quarter charges for recalls, including cars with faulty ignition switches.

The automaker said in its filing yesterday that opposing lawyers didn’t provide reliable evidence that the recalled models are unsafe if drivers follow already issued recall directions, including removing heavy objects from key rings. A court-ordered recall would undermine NHTSA procedures, GM’s lawyers said in the filing in a case brought by the owners of a Chevrolet Cobalt,

“It would be highly disruptive for this case and for all future recall cases,” GM said. “At its crux, it would utterly undermine the carefully devised process Congress intended for motor vehicle recalls.”

Finances, Reputation

A park-it alert would cause significant damage to GM’s finances and reputation that couldn’t be undone, the Detroit- based automaker said. If Ramos issues such an order, the company asked her to require the plaintiffs to post a substantial security bond “in light of the enormous damage this injunction would impose on GM.”

The couple that filed the lawsuit wouldn’t be able to pay such a bond, their lawyers have said. They argued at a court hearing last week that a park-it order is the only “fail-safe solution” to defects linked to 13 deaths until cars can be repaired. Lawyers for the plaintiffs have until tomorrow to file their written argument.

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

--With assistance from Jeff Green in Southfield, Michigan.