As the federal government continues to investigate General Motors for the delayed recall of certain Chevrolet, Saturn and Pontiac vehicles with faulty ignition switches, the Detroit-based manufacturer has announced a $500 cash allowance for the 1.3 million American owners of affected cars. Dealers have also been instructed to issue loaner vehicles to customers concerned with the safety of their cars. The cash allowance is good on any 2013 to 2015 model year vehicle from the GM family of brands.

"GM will not market or solicit owners using this allowance," said a notice posted by GM on the National Highway Traffic Safety Administration website, according to Automotive News. "We ask that you not market to or solicit these customers either. This allowance is not a sales tool; it is to be used to help customers in need of assistance."

The replacement ignition switch costs just $2 to $5 and could be replaced in minutes.

The announcement was originally made on March 4, but the story broke today, shortly after The Detroit News discovered that the replacement part in the Chevy Cobalt and HHR, Pontiac G5 and Solstice, and Saturn Ion and Sky costs just $2 to $5 and could be replaced in just a few minutes. The cost of the new ignition switch was discovered in the report of a JP Morgan analyst.

"We learned from Delphi's sell-side dinner Monday that actual cost to manufacture a replacement part could be as little as $2 to $5 each, and that labor costs to install the part would likely be low as well, considering it can be swapped out in a matter of minutes," said analyst Ryan Brinkman's report. According to a separate report from RBC Capital Markets, the total cost of the warranty work could hit $80 million. Repairs are expected to start in April, according to CNN.
Public sentiment, meanwhile, is (rightly, perhaps) swinging against GM. AN reports on safety advocates Clarence Ditlow and Joan Claybrook, two vocal critics of GM's handling of this recall. Ditlow and Claybrook have now called on the manufacturer to create a $1 billion trust to compensate the victims of the 31 crashes, which included 13 deaths, due to the faulty ignition switches.

"By concealing the ignition key defect for at least 10 years, GM created more victims and then robbed them of their legal rights through the passage of time," said Ditlow and Claybrook in a letter to GM's CEO, Mary Barra, obtained by AN. While there's some truth to their statement, Ditlow and Claybrook seem to forget one important fact: GM isn't necessarily liable for incidents and decisions made before its bankruptcy. GM's official response to Ditlow and Claybrook said as much.

"GM is focused on ensuring the safety and peace of mind of our customers involved in the recall. It is true that new GM did not assume liability for claims arising from incidents or accidents occurring prior to July 2009. Our principle throughout this process has been to the put the customer first, and that will continue to guide us."

Ditlow and Claybrook's letter to Barra does highlight an interesting part of this whole dilemma for GM, in that the company's newest CEO has had something of a baptism by fire. Besides a reportedly tough launch of the new Chevy Silverado and GMC Sierra, Barra has been faced with this recall.

"The probe into the GM ignition switch problem is continuing to snowball with questions swirling about how much GM and the National Highway Traffic Safety Administration knew about the issue and when they learned it," Kelley Blue Book senior market analyst, Jack Nerad, told Autoblog. "Some nine years have elapsed since the initial reports, begging those questions. Now with potential blood in the water, there is a gathering of interested parties to investigate potential regulatory and criminal misconduct." Ditlow and Claybrook are two such parties.

GM is not liable under the law for things that were done before bankruptcy.

It's easy enough for GM to shy away from the matter, though. GM is, as we said, not liable under the law for things that were done before bankruptcy. Nerad points out, though, that it's still highly beneficial for GM to sort this mess out as quick as possible.

"While the issue does not seem to have had much effect on current GM vehicle sales, the company must come to a quick and satisfying resolution of the issue to assure that it won't be tainted by sins of the past," Nerad said. "The fact that GM was rescued by the American taxpayers makes a resolution that is satisfactory to the average person on the street even more imperative than if such an issue arose in another company."

With news of this $500 cash allowance and the announcement of free loaners, though, the question can be asked as to whether GM has done enough. And that's where you come in. Has GM's move been enough in this recall, or should more be done? What would satisfy you as an owner of one of the recalled cars? Have your say in Comments.


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  • 70 Comments
      thyservant
      • 9 Months Ago
      Sadly this is only the tip of the iceberg. Most unfortunately Rick Wagoner is long gone.
      hp
      • 9 Months Ago
      New GM "so sorry about you driving with a deadly problem we've known about for a decade or so, here's $500 to buy another one of our cars." LOL
        sasdiggler
        • 9 Months Ago
        @hp
        What did Toyota offer after its fiasco with killing people because the care wouldn't stop?
          Famsert
          • 9 Months Ago
          @sasdiggler
          Deflection much?
          owen brown
          • 9 Months Ago
          @sasdiggler
          (The care wouldn't stop) what are you trying to say man?
        gregmlr
        • 9 Months Ago
        @hp
        This reminds me of the offers I keep getting from purchasing a new Hummer in 2010 offering $1,000 off of a new Escalade to try and entice me to stay with GM. Umm, gee thanks.
      Arizonarelax
      • 9 Months Ago
      What a waste of lives over a $2-$5 part. People in America need to wake up and throw these bastards in front of a non-biased court. Or better yet, make them drive one of their own defective cars. GM you will never see another penny of mine. Customer first? Yea, right to a coffin.
      Tariff The Imports
      • 9 Months Ago
      It's so unfortunate that people died due to this cover up. $500 towards a new piece of crap... Fool them twice, shame on Government Motors.
      flc
      • 9 Months Ago
      GM: If at first you don't succeed at killing your customers, try try try again by giving them $500 towards the next death-mobile....
        flc
        • 9 Months Ago
        @flc
        http://finance.yahoo.com/news/gm-recommends-light-key-rings-003413035.html
      Jerry
      • 9 Months Ago
      I owned a 2008 Cobalt LS coupe for the last six years. Was a pile of **** from day one. Had a TSB for bad synchronizer rings at 8000 miles, power steering pump recall at 30000 miles, shift cables rubbed through on the engine's rear pitch mount and ceased with corrosion at 40,000 miles, the engine had piston slap when it was cold from day one, went through 4 sets of control arm bushings by 85,000 mile (no joke). They had previously sent a TSB warning of defective key switches that would name and lock the key in the ignition or not let you turn it to start the car. Had to jiggle the key every time I went to start it for the past 4 years. My local dealer said both sets of keys were chipped? One was in a filing cabinet in the basement and had never been used :/ Lol, kind of funny now. Regardless, I gladly traded the lemon in for a 2014 Ford Fusion when the news of this latest key switch recall hit. Still managed to get $2700 for the turd somehow. Probably would get $270 now that this has blown up in GM's face. I was a 5th generation GM employee on both sides of my family. Sad, but I think my household is probably done with GM for good.
      MZR2.3
      • 9 Months Ago
      Im glad this fiasco has at least brought more people to the same viewpoint as myself on GM.
      Tariff The Imports
      • 9 Months Ago
      GM apologists. Just as pathetic as the failed company from the failing country.
      amge5.5
      • 9 Months Ago
      Well its good to know that if I want to kill people I just need to make sure I do it before I declare bankruptcy then get them to pay for me to get back in business.
      normc32
      • 9 Months Ago
      In the end the black box EDR(event data recorder) tells all. They've already settled out court on a few cases and the other cases were high speed and off road with mix of unbelted seat belts and alcohol.
        owen brown
        • 9 Months Ago
        @normc32
        Why do we need information from a black box when we all know it's Toyota's fault? Isn't that what you've been spewing ever since this story broke?
          normc32
          • 9 Months Ago
          @owen brown
          Toyota doesn't give access to black box data to dealerships as they have allot more to hide.
        bubba_roe
        • 9 Months Ago
        @normc32
        You are the ultimate dumpmestic fanboy.
      express2day
      • 9 Months Ago
      Companies need to be penalized for things like this. The victims deserve(d) better. It's also unfortunate what happens to the 99% of people (unaware employees, shareholders, suppliers, etc.) that may be adversely affected through no fault of their own.
      flc
      • 9 Months Ago
      Lol GM also sends out a new bulletin "use a lighter keychain"... WTF? Does the recall also include a roll of duct tape to use to keep the ignition in the on position?
        normc32
        • 9 Months Ago
        @flc
        The verbage was to remove everything from the key. The car is now driveable..imagine that!
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