Federal grand jury now investigating GM's use of faulty ignition switches

|By:, SA News Editor

A federal grand jury is now investigating General Motors' (GM) recall of 2.6M small cars tied to faulty ignition switches and has subpoenaed documents relating to the case, WSJ reports.

GM already has paid $35M to settle charges it violated federal auto safety regulations, but a criminal investigation by a federal grand jury could pose a much larger threat; in March, Toyota paid $1.2B to settle a Justice Department criminal investigation of its mishandling of safety problems.

Meanwhile, documents released yesterday by a House panel show that lead GM engineer Raymond DeGiorgio knew of the switch issues in 2005, and that some employees at supplier Delphi (DLPH) knew DeGiorgio had signed off on an upgrade to the ignition switch in 2006 without recording the change with a new part number.