GM Begins Repair Process in Ignition-Switch Recall

General Motors (NYSE:GM) is set to begin repairing the defective ignition switches that spurred a recall of 2.6 million vehicles, marking an important step toward calming concerns over the safety of those cars.

According to the company, GM plans to send letters this week to inform affected customers that parts are arriving at dealerships. The letter will also tell drivers to schedule a service appointment. GM expects repairs to follow soon after the mailing.

The nation’s largest automaker has come under scrutiny for a years-long delay in recalling older-model Chevrolet Cobalt small cars and other vehicles to address the faulty ignition switches. GM said it was aware of the problem as early as 2001.

The recall, which includes 2.3 million cars in the U.S., is connected to 13 deaths.

On Friday, GM began discussions with Kenneth Feinberg over possible compensation for the victims’ families.

Feinberg, who was recently retained by GM, is known for leading the compensation fund for survivors of 9-11 victims. He also oversaw executive compensation at companies that received TARP money.

GM senior staff met with Feinberg “to begin a very thoughtful and careful process to evaluate its options in response to accident victims whose vehicles are being recalled for possible ignition switch defects,” company spokesman Greg Martin said. “We will rely upon Mr. Feinberg’s expertise and objectivity to help us determine the best path forward.”

When asked about the subject during congressional hearings last week, CEO Mary Barra stressed that GM understands it has “legal obligations as well as moral obligations.”

Also last week, a federal judge delayed a decision on an emergency motion filed by lawyers who are asking the court to force a “park-it” request, which would require GM to tell owners to stop driving the affected vehicles.

GM has been telling owners to drive their cars with no extra items attached to the key. The company said testing was done to ensure that the vehicles are safe to drive without the extra weight.

Some lawmakers pressured Barra to change course and ask drivers to park the cars until they can be repaired.

The judge isn’t expected to make a ruling until later this week, by which time many drivers could have repairs completed.

The ignition-switch problem could force keys to inadvertently turn out of the “on” position, causing vehicles to stall and cutting off power to air bags.

GM initially issued two rounds of recalls covering 1.6 million vehicles worldwide. It later expanded the recall to include vehicles that may have been improperly repaired with defective parts.

In April 2006, a company design engineer approved a proposal by GM’s supplier, Delphi Corp., to alter the ignition switch. But the new ignition switch wasn’t given a new part number, making it difficult to track which vehicles were given the improved part.

The recall covers Chevrolet Cobalt and Pontiac G5 compact cars from model-years 2005 to 2010, plus 2003-2007 Saturn Ion, 2006-2011 Chevrolet HHR, 2005-2006 Pontiac Pursuit (Canada), 2006-2010 Pontiac Solstice and 2007-2010 Saturn Sky vehicles.

Shares of GM traded 1.5% lower at $34.28 early Monday afternoon.