ANNOUNCEMENT: The Car Book 2018 is now online!

Ratings on over 1,000 new & used models going back 5 years, from the Center from Auto Safety. Learn more about The Car Book 2018 here.

State of Arizona lawsuit says the 'new' GM wasn't born innocent.

Posted in News

GM Sued By The State of Arizona For $3 Billion
State of Arizona lawsuit says the 'new' GM wasn't born innocent.

— Arizona Attorney General Tom Horne has filed a lawsuit against General Motors that could possibly cost GM $3 billion. Filing the 125-page GM lawsuit on behalf of the residents of Arizona, the attorney general claims the automaker constantly concealed numerous safety defects for a decade, all to save money.

The "New" GM

The Arizona lawsuit against GM separates the "old" GM and the "new" GM, with the "new" GM incorporated in 2009 after the automaker filed bankruptcy.

After receiving billions in a U.S. government bailout, the new GM bragged it was changing its old culture and was building the best and safest vehicles in the world. The relentless marketing caused vehicle sales to increase, all while the public believed the "new" GM was actually new. However, the Arizona lawsuit says it was all an illusion created by GM as the automaker continued to conceal numerous safety defects.

Calling the number of concealed defects "astounding," Arizona says along with the disastrous ignition switch defects, GM vehicles are laced with defective airbags, seatbelts, brakes, brake lights, electronic stability control, windshield wipers, sensing and diagnostic modules and warning chimes.

While allegedly hiding the ugly truth from the public, the new GM walked in the footsteps of its past by training personnel to never use certain words. Many of the words relate to safety, such as "defect," "stall" and any other words that would indicate a safety defect.

Additionally, safety-related words were not to be used in "technical service bulletins" which were sent to GM dealers about how to repair vehicles.

According to Steve Oakley, who drafted a GM service bulletin related to ignition switch defects:

“The term ‘stall’ is a ‘hot’ word that GM generally does not use in bulletins because it may raise a concern about vehicle safety, which suggests GM should recall the vehicle, not issue a bulletin.”

Arizona says other GM personnel confirmed what Oakley said, saying “there was concern about the use of ‘stall’ in a TSB because such language might draw the attention of NHTSA.”

The complaint further alleges employees were trained in how to choose the cheapest part suppliers without the safety of owners in mind.

The lawsuit doesn't let current CEO Mary Barra off the hook, either. Recently GM claimed only lower level engineers knew about the defects, something the state of Arizona says is false.

In one example, Barra was told in 2011 about a defect in the power steering of several models. Barra was in charge of product development in 2011, but despite 30,000 warranty claims and almost 5,000 complaints about power steering problems, GM didn't admit the problems until 2014.

Saying GM has an "abysmal safety record" submerged in a "culture of deceit," the Arizona lawsuit says the new GM's way of dealing with safety defects is to ignore them.

Based on internal documents and congressional testimony, the new GM allegedly lives by two codes: The GM "salute" and the GM "nod."

The GM Salute

  • A crossing of the arms and pointing outward towards others, indicating the responsibility belongs to someone else.

The GM Nod

  • CEO Barra describes the GM nod as what happens when everyone nods in agreement to a proposed plan of action, but then leaves the room with no intention to follow through. Meaning, nothing gets done.

While GM managers were busy saluting and nodding, the lawsuit alleges GM's blatant lies caused consumers to invest in vehicles the automaker knew would decrease in value more than advertised.

According to the state of Arizona, the 2010 and 2011 Chevrolet Camaro have a diminished value of $2,000 when compared to the value of comparable vehicles; the 2009 Pontiac Solstice has diminished $2,900 in value; the 2010 Cadillac STS had diminished in value by $1,235 in September 2014; and the 2010 Buick LaCrosse had diminished by $649 in that same month.

GM is expected to strongly defend itself in court by denying Arizona's accusations, but GM will eventually have to explain the reasoning behind its massive advertising campaigns since 2009.

“[W]hen lives are on the line, you need a dependable vehicle you can rely on. Chevrolet and GM ... for power, performance and safety.” - Taken from a 2013 national GM advertisement


Become a Fan & Spread the Word