Letter from the US: General Motors seems too big to jail

October 18, 2015
GM officials knew about the dangers of the faulty ignition system as far back as 2001, but chose to install them in 1 million ca

The spreading scandal of Volkswagen's falsifying of emission tests to evade regulations has begun to expose the cozy connections between the German government and the company.

A recent article in the New York Times said: “There exists a revolving-door climate in which leaders glide between tops posts in government and auto firms.”

But a recent settlement between the US government and General Motors reveals similar corruption.

In the GM case, it was not dangerous emissions, but faulty ignition switches which were at issue. GM officials knew about the dangers of the faulty ignition system as far back as 2001, but chose to install them in 1 million cars anyway.

At least 124 deaths occurred because of the defect, GM admits, but the real death toll is likely far higher.

Of the tens of thousands of auto fatalities in the US each year, most don't get the scrutiny to uncover an underlying cause such as the faulty switches. The drivers get the blame whether they are guilty or not.

The defect in the switches allows them to suddenly turn off, cutting engine power, power steering and brakes — preventing air bags from deploying in the event of a crash. Driving a car that experiences such a failure is harrowing.

One such driver, Samantha Denti, said: “Driving this car was like playing a game of Russian roulette with my safety and that of my friends. I can't even begin to explain the fear and confusion that runs through you that moment when you have no control over your car.”

Last month, the government settled with GM, fining the company US$900 million, under a “deferred prosecution agreement”. This means no GM executives will be prosecuted for these murders — and neither will GM itself.

Just as in the case of the financial firms responsible for the crash of 2008, who had to pay some fines and no executives were charged with crimes, GM is deemed not only “too big to fail” but “too big to jail”.

Such fines are shrugged off by these huge companies as “business expenses” — a slap on the wrist. GM promises that it will “never, ever” do such a dastardly thing again.

Consumer and worker-safety advocate Ralph Nader points out that the $900 million fine is “really tax money recycled”, since GM was deemed too big to fail back in 2008 and received an $80 billion government bailout. Much of that bail out has not been paid back.

Amber Rose was a 16-year-old victim of GM's defect. She died in 2005 when her Chevrolet Cobalt crashed and the airbags failed to deploy.

Her mother, Laura Christian, said that at Amber's funeral, emergency personnel who were at the crash scene told her that the airbags should have deployed. “An investigator was hired shortly after,” she said, who discovered that the ignition switch was off. GM recently confirmed this was the case.

“It's absolutely ludicrous that GM is able to write a cheque to get away with what is tantamount to murder, in my opinion,” Christian told Democracy Now! “You know, the fact that there are going to be absolutely no individual prosecutions, I mean that all of our loved ones that died, they will have died in vain. I can't comprehend this.”

Since her daughter's death, Christian has become an auto-safety advocate. She runs the Facebook page “GM Recall Survivors”.

Christian said: “None of the families I've spoken to, and I've spoken to quite a few, none of us care about the money. What we care about is seeing real justice. And to us, the only thing that's going to mean anything is someone actually going to jail — the one thing that we are vehemently denied by the federal government.

“For what purpose, I don't know. Is GM just too big? I don't understand.”

Clarence Ditlow, head of the Center for Auto Safety, said: “GM killed over 100 people by knowingly putting a defective ignition switch into over 1 million vehicles. Today, thanks to its lobbyists, GM officials walk off scot-free while its customers are six feet under.”

In many cases — how many we cannot know because we do not know the actual number of accidents caused by the faulty switches — victims of GM in crashes are prosecuted.

Rena Steinzor, a law professor and author of Why Not Jail?: Industrial Catastrophes, Corporate Malfeasance, and Government Inaction, tells of one such case that is known: “The one that is most vivid in my mind is the case of Candice Andersen, who was driving a Saturn, and she ran the car into a tree after she lost control of it.”

The car stalled because of the switch and she lost the steering and brakes. After the crash the airbags failed to deploy.

“Unfortunately, her fiance was killed in the crash, and she was indicted for reckless homicide,” Steinzor says. Anderson got probation after a plea bargain, but only after “her parents had emptied their retirement account to pay for her defense. And only years later did a judge vacate her plea, when GM admitted that the switch was faulty. So the double standard for white-collar criminals and the average person is revealed in sharp relief by this very sad case.”

One commentator says: “GM does the crime, you do the time.”

Fifty-years ago Ralph Nader published his famous book, Unsafe at Any Speed: the Designed-In Dangers of the American Automobile, which finally led to more auto safety regulations like seat belts.

One thing he fought for at the time was a law to hold executives criminally responsible for such acts as the deliberate installation of the faulty ignition switch. The big business-dominated Congress failed to enact any such law, then or since.

Corporations were initially formed to limit the liability of shareholders for crimes done by the companies. This is directly reflected in Britain, where corporations use the abbreviation “Ltd” after their names, short for “Limited.”

Nader notes: “What we have now is corporations who got chartered many, many decades ago to limit the liability of shareholders, now have limited liability of the corporation itself.

“And the mockery is that General Motors and GM CEO Mary Barra are using shareholder money and taxpayer money to pay this flimsy $900 million settlement fine, and they're off scot-free.”

He also notes, “Hardly a month goes by when the New York Times or Wall Street Journal doesn't report that a top federal prosecutor leaves the job and triples or quadruples his or her salary by going to the very corporate law firms that were defending these corporations, so there's this merry-go-round that goes on.”

Discussing the 2008 financial crash, Nader says “Nobody was held responsible for it, in JP Morgan, Citigroup, Merrill Lynch, AIG, they weren't prosecuted … then they have the gall, after they jump ship and tank their companies and Wall Street, to go to Washington … and demand and get a bailout.

“This country is being corporatised into the ground. Its democracy is being driven into the ground. That's why we're very heartened by Laura Christian and the victims and families of the victims, because they are not going away. Victims and families of victims of product defects all over the country should organise and network.”

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