The company believed the vehicles could be safely coasted off the road after a stall, according to testimony from a GM engineer in one of dozens of civil suits against the automaker because of deaths related to the fault.
GM was forced to recall 1.6 million vehicles, many of them Cobalts, earlier this year because of a fault that turns off the ignition switch while the car is being driven. Also recalled were Saturn Ion, Chevrolet HHR, Pontiac Solstice, Pontiac G5 and Saturn Sky.
An estimated 12 deaths and 34 accidents are related to the ignition switch problem.
Difficult to steer
The lawsuit related to a fatal crash in which the victim was driving her Cobalt at around 80 km/h when the ignition failed and airbags failed to deploy because the car was turned off at the time of crash.
Others who were involved in similar accidents reported to the National Vehicle Safety Administration that the car was difficult, if not impossible to steer, under these circumstances.
But during the 2013 court case, an engineer testified that GM believed drivers should be able to handle the car without power steering.
In further bad news over GM's handling of the defect, Automotive News is reporting that GM re-engineered the faulty ignition on the Chevrolet Cobalt and Saturn Ion in 2006, but failed to create a new part number for it, a cardinal sin in the auto business.
The auto industry keeps detailed information on each part, including a new part number for each redesign. Not following this protocol helped stall its own engineers’ investigation into problems with the cars, the trade publication said.
GM did however issue service bulletins to its dealers about problems with the Cobalt as early as 2005.
In a meeting on May 15, 2009, GM engineers learned that data in the black boxes of Chevrolet Cobalts confirmed a potentially fatal defect existed in hundreds of thousands of cars.
GM denied problems
But in the months and years that followed, GM told the families of accident victims and other customers that it did not have evidence of any defect in their cars, interviews, letters and legal documents show.
Auto companies are subject to a law that makes it a crime to mislead U.S. safety regulators.
The U.S. government is investigating General Motors' handling of the defect and probing reports that it knew there was a problem for years.
After levying a $1.2-billion fine on Toyota last month over an unreported safety problem with its accelerator pedals, U.S. Attorney General Eric Holder said he expected that settlement to serve as a model for how prosecutors would approach future cases involving "similarly situated companies."
Although the Japanese automaker faces a large fine, criminal prosecution of individuals involved is not likely.
Since it announced the recall, GM has faced a number of private lawsuits, as well as class actions by auto owners who say the recall affected the value of their vehicles.
A wrongful death lawsuit was filed in Minnesota recently on behalf of three teenaged girls who were injured or killed in a 2006 crash. The lawsuit accuses GM of knowing about the ignition switch defect, but failing to fix the vehicles.
In two private lawsuits in Texas, the plaintiffs urge GM to tell owners of affected Saturn and Cobalt cars not to drive the cars.
A U.S. senator on Monday asked the federal government to force General Motors to establish a fund to compensate consumers affected by the problem.