The U.S. government's auto safety watchdog likely is looking into whether General Motors was slow to report problems that led to 13 deaths and a massive recall of small cars.
The National Highway Traffic Safety Administration has the authority to fine the company at least $35 million for not being forthcoming with information.
GM on Tuesday doubled to 1.6 million the number of small cars being recalled to fix faulty ignition switches linked to multiple fatal crashes. The company also issued a rare apology, saying its process to examine the problem was not robust enough.
The safety agency said in a statement Tuesday that it is reviewing GM documents and has questions about when GM found the ignition defect and when it notified regulators. Documents filed by GM show it knew of the problem as early as 2004.
"NHTSA will monitor consumer outreach as the recall process continues and will take appropriate action as warranted," the statement said. A spokesman wouldn't say what action is being considered or comment further.
Since undergoing a painful bankruptcy in 2009, GM has removed layers of bureaucracy, improved the quality of its vehicles and is quicker to issue recalls when problems occur. However, its admission that its processes were lacking 10 years ago shows how the old culture can still haunt the automaker.
"The chronology shows that the process employed to examine this phenomenon was not as robust as it should have been," GM North America President Alan Batey said in a statement. "Today's GM is committed to doing business differently and better."
On Feb. 13, GM announced the recall of more than 780,000 Chevrolet Cobalts and Pontiac G5s (model years 2005-2007). Then on Tuesday, it doubled up, adding 842,000 Saturn Ion compacts (2003-2007), and Chevrolet HHR SUVs, Pontiac Solstice and Saturn Sky sports cars (2006-2007). Most of the cars were sold in the U.S., Mexico and Canada.
GM says a heavy key ring or jarring from rough roads can cause the ignition switch to move out of the run position and shut off the engine and electrical power. That can knock out power-assisted brakes and steering and disable the front air bags. The problem has been linked to 31 crashes and 13 front-seat deaths. In the fatalities, the air bags did not inflate, but the engines did not shut off in all cases, GM said.
It was unclear whether the ignition switches caused the crashes, or whether people died because the air bags didn't inflate.
According to a chronology of events that GM filed Monday with NHTSA, the company knew of the problem as early as 2004, and was told of at least one fatal crash in March of 2007. GM issued service bulletins in 2005 and 2006 telling dealers how to fix the problem with a key insert, and advising them to warn customers about overloading their key chains. The company's records showed that only 474 vehicle owners got the key inserts.
GM thought the service bulletin was sufficient because the car's steering and brakes were operable even after the engines lost power, according to the chronology.
By the end of 2007, GM knew of 10 cases in which Cobalts were in front-end crashes where the air bags didn't inflate, the chronology said.
In 2005, GM initially approved an engineer's plan to redesign the ignition switch, but the change was "later canceled," according to the chronology.
GM spokesman Alan Adler said that initially the rate of problems per 1,000 vehicles was too low to warrant a recall. But he said safety information was kept in different places in the company 10 years ago.
The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.