General Motors recall crisis widens with second faulty part

The recall crisis surrounding ignition switches on a series of General Motors vehicles substantially widened on Thursday when the company said it would need to replace a second part on 2.2m recalled vehicles in the US.

The company said it would replace ignition lock cylinders as well as ignition switches on the vehicles, because the ignition keys could be removed from the locks while the vehicles were in motion.

News of the recall's expansion came on the same day that GM announced it had put two engineers on paid leave as it grappled with the effects of its botched ignition switch recall.

GM recalled 2.6m compact cars - mostly built between 2002 and 2007 - worldwide in February and March because of faults with the ignition switches, an internal part of the ignition assembly. As a result of the fault, which the company first suspected in 2001, vehicles could switch from the "run" to "accessory" position while the vehicle was being driven.

The shift could cut the vehicle's engine and disable the airbags and power steering. GM estimates that at least 12 people died in the US as a result of crashes involving the ignition switch fault.

GM said of the new recall that it was aware of "several hundred complaints" about keys coming out of ignitions in the affected vehicles, which include Chevrolet Cobalts, Saturn Ions, Pontiac G5s and other models.

"The cylinders can allow removal of the ignition key while the engine is running, leading to a possible rollaway, crash and occupant or pedestrian injuries," GM said.

Searches of safety databases revealed one injury claim related to a vehicle rollaway in a parking lot and no deaths, the company added. It warned owners of affected vehicles to ensure they followed correct parking procedures, including putting automatic transmission vehicles into the "park" position.

The company, which a month ago estimated recalls would cost it $300m in the first quarter, on Thursday said it expected to take $1.3bn in recall-related costs in the first three months.

The recall has widened in stages, starting with two separate batches of older vehicles in February, then a batch of more recent vehicles in March. The company has also announced a series of recalls of other vehicles over faults not yet thought to have led to any fatalities.

Karl Brauer, an analyst for Kelley Blue Book, the car information site, said the extent and cost of the ignition switch recall had grown "dramatically" in the past few weeks.

"Much of this stems from GM's desire to comprehensively address all aspects of the recall, though there's also growing concern over potentially deceptive or criminal behaviour that could result in government fines," Mr Brauer said.

General Motors' shares, which rose after the announcement of the engineers' suspensions, fell again after the news about the ignition lock cylinder, and were down 1 cent for the day at $33.61 by mid-afternoon.

The company declined to name the two sent home in what GM called an "interim step" carried out while GM sought the truth about what happened over the switches.

However, one GM engineer - Ray deGiorgio - was accused at a US Senate hearinglast week of having lied in a sworn deposition over the company's redesign of the switch in 2006.

Claire McCaskill, a Democratic senator for Missouri, said documents approving a controversial change of ignition switch bore "the signature of Ray deGiorgio", even though he later denied knowing who had approved the change.

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"This is an interim step as we seek the truth about what happened," Ms Barra said. "It was a difficult decision, but I believe it is best for GM."

Ms Barra made the announcement about the suspensions as she launched a new "Speak Up for Safety" campaign at the company, which she took over as chief executive on January 15.

The campaign will reward employees who devise initiatives that make vehicles safer. It will also reward employees for speaking up over issues that they believe could affect customer safety.

"GM must embrace a culture where safety and quality come first," Ms Barra said. "GM employees should raise safety concerns quickly and forcefully, and be recognised for doing so."

Ms Barra has sought to make a clear distinction between the "old GM" - from before its 2009 government-led bankruptcy restructuring - and the "new GM," which she has vowed will work quickly and effectively to resolve the problems with the cars, none of which is still being manufactured.

Earlier this week, the National Highway Traffic Safety Administration announced it was fining GM for providing only partial answers to a 107-request questionnaire it sent the company in its inquiry over the reasons why it took GM so long to recall the vehicles with faulty switches.

GM said that, despite the recall expenses, it expected to report "solid core operating results" for the first quarter.

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