Springfield law firm tackles GM defense

General Motors added another six recalls to its lengthy 2014 list on June 30, when it announced nearly 8.5 million cars from model years 1997–2014 had ignition key problems.

The issues mimic ignition fault defects the company identified in 2.6 million vehicles, most prominently the Chevy Cobalt, that led to at least 13 deaths and put its CEO in the congressional hot seat this spring.

Just this year, GM has issued recalls for more than 29 million vehicles – roughly three times as many cars as it sold worldwide in 2013. All that activity has led to a few headaches for dealers and a slew of opportunities for lawyers, but the overall impact has been surprisingly minimal to date.

According to GM.com, June sales were up 1 percent compared to June 2013, and the first half of the year was its best since 2008.

Defense mechanism
While the product and legal problems for the American car manufacturer continue to mount, one Springfield law firm is involved in defending General Motors Co. (NYSE: GM) against a class-action lawsuit and a civil suit, both filed in eastern Missouri.

Rod Loomer, an attorney with Turner, Reid, Duncan, Loomer & Patton PC, is leading a team from his office representing GM in cases brought against the automaker in the Show-Me State.

Loomer, who has 40 years of automobile industry and insurance experience, said his relationship with GM was solidified in 1986, when he successfully defended the company in a case among the first stuck-accelerator lawsuits in the nation.

“A lot of people might remember the Kmart parking lot incident in which a young boy was run over by an elderly lady. We tried it here in Springfield in federal court: Peterson v. General Motors,” Loomer said. “After that, rather than reinventing the wheel each time, they picked certain lawyers to handle seatbelt and airbag cases, which is what I did. Other lawyers handled rollover roof crashes. Others handled fires.”

Following GM’s 2009 bankruptcy, Loomer said a majority of his practice work has come from Ford Motor Co. (NYSE: F).

Currently, Loomer and colleagues Sherry Rozell and Steven Ward, along with two paralegals, are gathering information, conducting interviews and making motions to ensure the cases would be funneled into multidistrict litigation proceedings.

Loomer and company are just a small cog in a much larger legal wheel related to GM’s ignition-switch issues, which could result in hundreds of cases filed against GM across the country.  

GM announced June 30 it hired Ken Feinberg – who assisted with disaster claims related to BP’s oil spill – to oversee its compensation plan for families of those who can prove their loved ones died due to an ignition-switch failure. The company had caught the ire of Congress after it was revealed certain engineers knew of ignition-switch failures caused by heavy, dangling keys as early as 2005.

Now, Loomer said GM is anxious to settle claims.

He said his firm is working with a Dallas attorney to coordinate civil litigations and a Chicago counselor over all class-action suits.

“We do two things. We conduct the investigation. We locate and interview the witnesses because despite what you might hear in the media, not all of these accidents are due to faulty ignitions,” Loomer said. “Then, if we can remove it out of state court to federal court, we’ll do that.”

On July 1, he said his two GM cases are only taking up 5 percent of his time, but that’s likely just the tip of the iceberg. His practice has managed up to 80 cases at one time, and Loomer said the firm is prepared to handle whatever GM throws their way.

“Let’s put it this way: We’re not staffing up to handle these,” he said.

Sales expectations
Despite the spiraling recalls, Thompson Buick GMC Cadillac co-owner Lynn Thompson said new car sales at the GM dealership were up 9 percent in June compared to the same month last year.

“I think customers realize that cars are going to get fixed as soon as the parts are available,” Thompson said, noting used car sales also were up, some 8 percent, from a year ago.

Missouri State University Associate Professor of Marketing Ron Clark said there are a few reasons why GM recalls have yet to hurt sales.

“Most of the vehicles that GM has recalled aren’t current models. The cars most frequently associated with accidents due to the recall are the Cobalt, a model that hasn’t been available since 2010 and the Pontiac G5, a car that died with the Pontiac product line,” Clark said in an email.

Another key reason is that many consumers don’t know which cars fall under the GM moniker. In addition, he said recalls have become more commonplace in recent years, making people desensitized to recall reports.

That’s good news for GM, Clark said, because while the brand has taken a hit in the media, individual models should remain relatively unharmed. That also means good news for consumers as resale values for most GM vehicles should avoid significant depreciation, he said.

Of course, it could be that the shoe hasn’t dropped, yet. Loomer said while recall reports have been all over the national news, many people still haven’t gotten the message. Recently, he was speaking with another client, who owns a business in Texas, and Loomer mentioned he was doing work on GM ignition cases.

“It’s a $50 million company. He had no idea what I was talking about,” Loomer said.

Despite the most recent recalls, Thompson projects second-half sales on par with June’s results. Springfield Business Journal’s calls to GM dealers Reliable Chevrolet in Springfield and Pinegar Chevrolet in Republic were not returned by press time.

For dealers, vehicle identification numbers provide the key to understanding whether a recalled vehicle needs a repair. If a customer has a question, the dealership can run the VIN, and then send off for a free part. The dealership gets reimbursed for the time its service department spends on the fix.

Thompson said his staff has called hundreds of customers to let them know their cars could be impacted, and they’ve fixed more than 100 vehicles. The repairs are a top priority for GM and his dealership, which is why Thompson said he’s not worried the automaker’s reputation would be damaged by the quantity of recalls.

“GM is being proactive,” Thompson said. “They’re recalling cars back to 1997. It’s almost ridiculous, but I support it.”

He said demand for parts and service has been sporadic.

“You just can’t wave a wand and make parts available. But parts are coming in,” Thompson said.