General Motors is under fire from both Canada and the U.S. as investigation into its recalls involving ignition switch defects — which includes more than two million GM vehicles worldwide — continues.
Specifically, the defect affects 235,855 vehicles in Canada, and Merchant Law Group LLP recently launched a Canada-wide class action against the manufacturer concerning the recent recall of an ignition-switch allegedly linked to 13 accidental deaths.
"The ignition switch defect is a widespread problem affecting more than 235,000 General Motors vehicles in Canada. Owners of these GM vehicles are at risk and can experience a sudden unexpected loss of power and engine shut down due to the ignition defect alleged by this class action. Our class action seeks compensation for affected vehicle owners and proper repair of these GM vehicles," stated Tony Merchant, Q.C., of Merchant Law Group.
The national class action states the affected GM vehicles "suffer from a design defect which puts drivers at risk of the ignition switch disengaging from the ‘ON’ position to the ‘OFF’ position” while driving, resulting in loss of electrical power, loss of power-steering function, loss of electrical brake-assisting and/or loss of air-bag function."
GM models affected by the ignition switch defect include:
2004-2005 Chevrolet Cobalt
2006-2007 Chevrolet HHR
2005-2007 Pontiac G5
2006-2007 Pontiac Solstice
2003-2007 Saturn Ion
2006-2007 Saturn Sky
The recall issues plaguing GM are escalating as the weeks go by.
Late last week, General Motors confirmed another widely reported negative development for the OEM — that it issued a stop sale of the Chevrolet Cruze from the 2013 and 2014 model years equipped with 1.4-liter turbo engines.
GM spokesperson Alan Adler indicated the bulletin sent to U.S and Canadian franchised stores late last Thursday covers about a third of the Cruzes in dealer inventory.
“We will share any updates as they become available,” Adler said with offering any further specifics as to why the vehicles no longer should be sold.
This development came just days before new chief executive officer Mary Barra would testify on the U.S. Capitol Hill. Both the U.S. House and Senate are holding hearings this week in regard to the recall of older vehicles with ignition problems that led to a dozen deaths because the units stalled unexpectedly and disabled airbags.
Much to the frustration of lawmakers who are members of the U.S. House Subcommittee on Oversight and Investigations, Barra could not give direct answers to pointed questions during Tuesday's hearing regarding the automakers handling of ignition switch problems in millions of recalled vehicles.
Barra often referenced the ongoing efforts of U.S. Attorney Anton Valukas to conduct “a thorough and unimpeded investigation of the actions of General Motors.”
When representative after representative wanted Barra to answer either “yes” or “no” as to when the OEM knew problems with ignitions in several discontinued models that weren’t recalled until several weeks ago, the GM boss who has been on the job only for a few months continued to point to the information the OEM is hoping to uncover that’s eventually led to a dozen deaths.
“I’m anxiously awaiting the results of his study,” Barra said several times throughout the course of the more than two hours she testified on Tuesday.
GM announced late last week that it’s expanded its recall to cover more than 2 million units to replace the ignition in units such as the Chevrolet Cobalt. Lawmakers wanted assurance the new parts meet the automaker’s specifications.
For more information on the U.S. Senate and House hearings regarding GM recalls, see the sister publication Auto Remarketing's story here.
Editor’s Note: Nick Zulovich, staff writer, contributed to this report.
Kia Canada Inc. announced it has resolved litigation involving a restatement of fuel consumption ratings from November 2012.
The company has reached an agreement with current and former owners and lessees of vehicles affected by the restatement, which included 41,000 Kia vehicles from the 2011-2013 model years.
The proposed settlement agreement is valued at up to approximately $23 million. The company explained the final number will be determined by the actual number of customers that choose to participate in one of the settlement’s lump-sum payment options, or instead to remain in the lifetime reimbursement program Kia Canada introduced at the time of the restatement, which reimburses based on actual fuel expenses.
"Kia Canada is pleased with the proposed agreement, which demonstrates Kia's ongoing goal of ensuring our customers are fairly compensated," said Kay Nguyen, managing legal counsel at Kia Canada. "Kia Canada is fully committed to customer satisfaction, and this proposed settlement provides flexibility for our customers by adding additional payment options to the existing reimbursement program that Kia previously introduced."
Under the terms of the proposed settlement, Kia Canada and the plaintiffs agreed to add lump-sum payment options, the company shared.
"The proposed cash lump-sum amount varies by vehicle and ownership type and accounts for previously received compensation and will be reduced by any amounts already received through Kia Canada's existing reimbursement program,' Kia Canada officials said.
Consumers can also elect other options such as a dealership credit of 150 percent of the lump sum cash payment amount, or a credit of 200 percent of the cash amount towards the purchase of a new Kia vehicle.
"Today's agreement clearly articulates Kia's willingness to take care of its customers, and Kia should be commended for doing the right thing," said Michael Peerless of Siskinds LLP, the lead plaintiff lawyer involved in the settlement. "This settlement provides additional options for consumers by allowing them to choose from a number of lump sum payment options, which provides a real benefit to the class of consumers."
Courts in Ontario and Quebec are expected to review the agreement for preliminary approval early this year.
Acura Canada announced two recalls this week that affect more than 3,000 model-year 2014 units in Canada.
First, Acura said it is recalling 3,074 MDX vehicles from the 2014 model year to inspect and, if needed, tighten or replace bolts used to secure the propeller shaft, a component of the all-wheel drive system.
“During assembly, it is possible that one or more of the four bolts that attach a propeller shaft to a universal joint were not tightened properly,” Acura officials said. “A bolt that is not properly fastened could loosen over time and fall out, possibly allowing one end of the propeller shaft to detach.
“A detached propeller shaft could cause excessive noise and possibly damage the vehicle while driving, increasing the risk of a crash,” they continued. “No customer complaints, crashes or injuries have been reported related to this issue, which was discovered during vehicle assembly.”
Acura emphasized that it is announcing this recall to encourage owners of all affected MDX vehicles to take them to an authorized dealer as soon as they receive notification of this recall from the automaker.
Mailed notification to customers will begin this month.
Acura Canada also announced it will recall 364 RLX vehicles from the 2014 model year in Canada to replace rear suspension bolts that may not have been tightened properly.
“During assembly, it is possible that one or more of the eight bolts that attach several rear suspension components were not tightened properly,” Audi officials explained. “A bolt that is not properly fastened could loosen over time and fall out, possibly allowing a portion of the rear suspension to move out of proper alignment, increasing the risk of a crash.”
No accidents or injuries have been reported related to this issue.
Mailed notification to customers will begin in mid-January, 2014.
Canadian customers can go to www.acura.ca/recalls or call (888) 9ACURA9 for more information.
