Canada Investigating Two Crashes Tied to GM Recall

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Published May 27, 2014

| FOXBusiness

Canada is investigating two fatal crashes that involved General Motors (GM) vehicles included in the automaker’s ignition-switch recall, according to the country’s transportation department.

The press secretary for Transport Minister Lisa Raitt confirmed on Tuesday that the Canadian government is looking into two cases where air bags did not deploy in cars recalled by GM. Transport Canada received complaints of fatal accidents in June 2013 and April of this year.

In the first case, Canadian officials have determined the key moved out of the “run” position after the vehicle left the road. “Therefore, there may be various contributing causes for the collision and fatality,” the department said in a statement.

Transport Canada said it is still investigating how the key’s position influenced air-bag operation in that accident. It is also in the process of determining why air bags failed to deploy in the most recent complaint.

Transport Canada’s findings so far have not revealed any evidence that GM Canada failed to comply with the country’s Motor Vehicle Safety Act. The agency did not rule out the possibility of taking enforcement actions if GM Canada is found to be in violation of the law.

A GM spokesman said the two crashes in Canada were included in GM’s accident totals for the ignition-switch recall. The company has said the recall, which was initiated in February, is tied to 13 deaths and covers 2.6 million vehicles worldwide.

In the U.S., the recall covers 2.2 million cars such as the 2005 to 2010 Chevrolet Cobalt and Pontiac G5 compact cars.

GM, the largest U.S. automaker, has come under scrutiny since it was revealed that the faulty ignition switches were on GM’s radar early on. According to a timeline provided by the company, some GM engineers were aware of a possible defect as early as 2001.

Earlier this month, GM agreed to pay a maximum $35 million fine to the National Highway Traffic Safety Administration. The Detroit-based company also admitted it failed to provide a recall plan for the affected vehicles within five business days of learning about the safety issue, as required by law.

GM has said an internal investigation led by former U.S. Attorney Anton Valukas may be completed by June.

Following the ignition-switch recall, GM fast-tracked pending safety reviews that led to recalls covering millions of additional vehicles this year.

GM announced four new recalls last week and disclosed plans to take a $400 million charge in the second quarter to cover costs tied to repairs. The company initially expected to book a $200 million write-down.

Shares rose 17 cents, or 0.5%, to $33.80 in recent trading. GM is down about 17.3% so far this year.

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