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We Didn’t Ask; They Didn’t Tell

4:26 PM, May 23, 2014 • By GEOFFREY NORMAN
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It has been days now (at least two of them) since General Motors has issued a recall on any of its cars.  But then, the law of diminishing returns applies here.  After the first 15 million, there aren’t that many GM vehicles left out there for recalling.

It is curious how the company could have gone through its recent bailout by the government without these problems coming to the attention of the people who made the deal. They were spending taxpayer money, after all, to buy a problematic asset. So were they not obliged to look under the hood and kick the tires?

Seems not.  As Eric Beech of Reuters reports:

Two former members of the U.S. auto task force that helped restructure General Motors Co in 2009 during its bankruptcy said they were not aware at the time of the defective ignition switches linked to at least 13 deaths.

The "task force” representing the tax payers had to take it more or less on faith when told by the seller that they were getting a good company. New tires. Oil change every 3,000 miles. Just needed a little body and fender work.

Steven Rattner, who headed the task force, said his group would not have learned about the problem unless someone at GM had told them.

"We were not forensic accountants. We were not FBI investigators. We had about 40 days to do all this due diligence. We're not going to find something like that out unless people tell you.” 

So it is the fault of the people at a broken company that the people buying the company did not know it built a lousy product.

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