GM Recalls More Cars and Court Orders Company to Release Files

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By Paul Ausick Updated Published
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Chevrolet-Impala
courtesy of General Motors
General Motors Co. (NYSE: GM) is not having a good weekend. Late on Friday a federal judge ordered the company to release documents related to the ignition switch defect recall, and then on Saturday GM revealed a recall of more than 200,000 cars to fix a brake problem that could cause a fire.

GM posted documents to the National Highway Traffic Safety Administration (NHTSA) website indicating that a parking-brake defect may cause the brake pads to remain partially engaged with the rotor, potentially building up “excessive heat that may result in a fire.” The recall affects 205,309 Chevrolet Impalas and Cadillac XTSs sold in the United States and 16,249 sold elsewhere. The Impalas were manufactured in model years 2014 and 2015. The Cadillacs were made in model years 2013 through 2015.

The company said it is not aware of any crashes, injuries or deaths resulting from the defect. The NHTSA said that drivers may see “poor vehicle acceleration, undesired deceleration, excessive brake heat, and premature wear to some brake components.”

A potentially bigger problem for the company is a ruling from a federal judge ordering GM to release internal files and documents to plaintiffs and their attorneys related to the company’s recall of vehicles with defective ignition switches. The company must turn over to the plaintiffs’ attorneys all the documents that GM submitted to Congress and all the documents related to the company’s internal investigation of its handling of the defect.

The judge’s ruling did provide that GM need only release documents related to crashes that occurred after the company emerged from bankruptcy protection in July 2009. In another case, a different court is deciding whether the company may have committed fraud in its bankruptcy filing, which could lead to the release of earlier documents. GM’s own investigation indicated that no company executive knew of the ignition switch defect, even though it had been identified by other employees.

To date, 19 deaths have been determined to have been caused by the defect, according to GM’s victim compensation fund administrator, Kenneth Feinberg. GM has recalled about 2.6 million vehicles for the ignition switch defect.

ALSO READ: GM Stops Sales of Hot-Selling Corvette

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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