Adding to the woes at General Motors Co. (NYSE: GM), the National Highway Traffic Safety Administration (NHTSA) has begun an investigation of a number of Chevy Impala models. Up to 60,000 of the latest model of the car could be affected.
The Detroit News reported:
The agency’s preliminary investigation follows a single report of “inappropriate activation of the emergency braking system” in a brand new 2014 Impala. The driver “alleges that the driver assist system inappropriately activated emergency braking bringing the vehicle to a complete stop under what the driver considered to be full braking force,” according to the complaint.
GM said it is cooperating with the government’s efforts.
For GM management, the news could not come at a worse time. It is already plagued with recalls that involve 2.6 million cars with faulty ignition switches. This series of recalls has been so severe that new CEO Mary Barra has been questioned before both a Senate and a House Committee. GM says it will not address the matter fully until it completes an internal investigation, but it has already put two engineers on leave and several of GM’s most senior executives have departed. A new restructuring of the engineering wing of GM involves the ouster of the head of global engineering and the addition of 35 new safety personnel.
GM’s latest defense against what has started to become an onslaught of suits is to ask the Federal Bankruptcy Judge of the South District of New York to block liability actions on GM cars made before the June 10, 2009, Chapter 11 filing. Most of the cars in the current, huge recall were made before that date. If the court cooperates, GM would save hundreds of millions of dollars in payouts to people who bought the recalled cars.
GM’s greatest problem going forward is the effects of the recalls on its brand image, obviously critical to future sales. The Impala probe can only make that worse.
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