The newest details shared by General Motors about its recall investigation turned up several noteworthy developments — suspended engineers, ignition lock cylinders and a $1.3 billion charge to its first-quarter accounting ledger.

On the same day the OEM made an addition to the repair order associated with the recall, increasing its costs for campaigns so far this year, GM chief executive officer Mary Barra confirmed two automaker engineers have been placed on paid leave following a briefing from Anton Valukas, the former U.S. attorney overseeing an independent investigation into circumstances leading to a safety recall of 2.6 million older vehicles for ignition defects.

“This is an interim step as we seek the truth about what happened,” Barra said. “It was a difficult decision, but I believe it is best for GM.”

Thursday’s development that the engineers had been placed on leave shows the continuing magnitude of the entire situation, according to Karl Brauer, senior analyst at Kelley Blue Book.

“Suspending these two engineers is another indicator of how seriously General Motors is taking this ignition switch recall,” Brauer said. “This action comes on top of CEO Mary Barra ordering an internal investigation and hiring a global safety chief, and it gives merit to her claims of a ‘new GM’ that won’t operate they way old GM did.”

Barra made the announcement as GM created what it dubbed a Speak Up for Safety program to recognize employees for ideas that make vehicles safer, and for speaking up when they see something that could impact customer safety

“GM must embrace a culture where safety and quality come first,” Barra said. “GM employees should raise safety concerns quickly and forcefully, and be recognized for doing so.”

Barra spoke at an employee town hall meeting on Thursday, announcing the internal Speak Up for Safety campaign. The campaign is intended to remove perceived and real barriers to candid conversations between employees and their leaders as a step to foster a “safety first” culture.

Reporting issues only matters if there is follow-up as Barra said the Global Vehicle Safety Group will be accountable to take action or close issues within a prescribed time period.

“We will recognize employees who discover and report safety issues to fix problems that could have been found earlier and identify ways to make vehicles safer,” she said.

The company said more details will be announced in the next 30 days.

Costs Grow as Recall Repair Orders Expand

In a separate announcement, GM informed the National Highway Traffic Safety Administration on Thursday that the automaker is adding ignition lock cylinders to its safety recall of 2.2 million older model vehicle in the United States.

GM told federal regulators the cylinders can allow removal of the ignition key while the engine is running, leading to a possible rollaway, crash and occupant or pedestrian injuries.

Furthermore, the OEM acknowledged the entire recall process is going to cost more than it originally estimated.

GM indicated Thursday that the company expects to take a charge of approximately $1.3 billion in the first quarter, primarily for the cost of recall-related repairs announced so far this year to date and related courtesy transportation. Officials said this amount includes the $750 million charge previously announced on March 31.

“On a preliminary basis, despite the $1.3 billion recall charge, GM currently expects to report solid core operating performance in the first quarter financial results,” officials said.

Part of that rising price tag includes the ignition lock cylinders discussed on Thursday.

GM emphasized that owners of manual transmission vehicles should be sure the ignition is in the “Off” position and set to reverse gear with the parking brake set before removing the key. Owners of vehicles with automatic transmission should be sure the vehicle is in “Park” before removing the key.

The OEM acknowledged that it is aware of several hundred complaints of keys coming out of ignitions.

“Searches of GM and government databases found one rollaway in a parking lot that resulted in a crash and one injury claim. The same searches turned up no fatalities,” GM said.

GM has decided to replace the ignition lock cylinders and cut and, if necessary, reprogram new keys.  

The vehicles covered are model years:

— 2003-2007 Saturn Ion
— 2005-2010 Chevrolet Cobalt
— 2006-2010 Pontiac Solstice
— 2007-2010 Pontiac G5
— 2007-2010 Saturn Sky
— 2006-2011 Chevrolet HHR

As has been reported previously by Auto Remarketing, these vehicles were recalled in recent weeks for ignition switches that may fail to meet GM’s torque specification. The ignition switch may unintentionally move from the ‘run” position to the “accessory” or “off” position with a corresponding reduction or loss of power.

“This risk may be increased if the key ring is carrying added weight or if the vehicle goes off the road or experiences some other jarring event,” GM reiterated in Thursday’s announcement. “The timing of the key movement out of the ‘run’ position, relative to the activation of the sensing algorithm of the crash event, may result in the airbags not deploying, increasing the potential for occupant injury in certain kinds of crashes. 

“Until recall repairs are made, it is very important that customers remove all items from their key rings, leaving only the vehicle key. If there is a key fob, it also should be removed from the key ring,” the automaker said.

Latest on the Wholesale Impact

In a blog post published on Wednesday, David Paris from NADA Used Car Guide offered an update on the wholesale price movement for the Chevrolet Cobalt.

Since recalled in early February, Price indicated wholesale prices for the Cobalt have remained strong, and over the course of this period, average AuctionNet prices for 2005-2010 model year Cobalts have increased by a range of 1 percent to 10 percent through the week of March 31 (on a two-week moving average basis).

Paris pointed out that Cobalt price movement has been directionally in line with the recent seasonally-induced rise in prices for all 2005-2010 model year compact cars. He back up his assertion by discussing 2010 model-year vehicles.

Since early February, NADA UCG determined average compact car wholesale prices have increased by 2 percent, and Cobalt prices have grown by an even better rate at 6 percent.

“Price movement for other recalled GM models have been more-or-less directionally similar to what’s been recorded on the Cobalt,” Paris said.

“When Toyota prices suffered due to the unintended acceleration recall of nearly 11 million vehicles worldwide back in 2009 and 2010, it took approximately three weeks to notice a change in used Toyota prices,” he continued. “During Toyota’s recall there was a haze of uncertainty as to what was causing the problem — was it a slipping floor mat, malfunctioning pedal or some sort of programming glitch?  This uncertainty struck fear into the hearts of consumers, and prices ultimately suffered.

“GM, on the other hand, was able to identify the issue quickly and worked with suppliers to create a fix, which has helped to ease consumer fears,” he went on to say.

During his quarterly conference call on Monday, Manheim’s chief economist Tom Webb agreed with the assertions made by NADA UGC.

“The specific vehicles involved in the recall with regard to the ignition switch obviously are older, lower-priced units which are no longer in production. So the impact on prices is going to be relatively modest,” Webb said.

“I think the major issue in terms of overall residual pricing and how it will effect GM as a brand is the headline risk associated with this. In discussions with dealers so far, they’re obviously concerned about it, but I would say it’s not an overall issue — yet,” he continued.

“It does effect the defleeting of the rental risk pool as more units are put into service loaner and insurance replacement demand. It does have an effect there,” Webb added.