US regulators twice failed to investigate reports of faulty GM ignition switches

US federal regulators twice failed to open formal investigations into faulty ignition switches in General Motors (NYSE: GM - news) vehicles blamed for 13 deaths, a congressional panel said Sunday.

House Energy and Commerce Committee staff concluded that National Highway Traffic Safety Administration investigators concluded in both 2007 and 2010 that there was insufficient evidence to launch formal probes into whether GM vehicles had a defect that prevented airbags from deploying in crashes.

The panel of investigators "did not identify any discernible trend and decided not to pursue a more formal investigation," according to committee staff.

GM's new chief executive Mary Barra and NHTSA Acting Administrator David Friedman are due to testify before the House panel and a Senate subcommittee on Wednesday.

Barra will be asked to explain why the carmaker continued to equip vehicles with the faulty switches even though it was aware of the problem as early as 2001.

In February 2002, GM approved a Delphi Automotive (NYSE: DLPH - news) design for a faulty switch used in up to 2.6 million now recalled vehicles, "even though sample testing of the ignition switch torque was below the original specifications set by GM," according to the House investigators.

But the Cobalt project engineering manager then ordered the investigation to be closed with no action in March 2005, saying that "lead-time for all solutions is too long," "tooling cost and piece price are too high" and none of the proposed solutions "represents an acceptable business case."

The House committee memo, however, noted that none of the documents it has obtained so far clearly explains what exactly an "acceptable business case" might be and how the decision was made.

GM, which has apologized for the mishap, has launched an internal investigation supervised by a high-profile lawyer.