There are profound lessons for CEOs and managers in the GM recall report, but also for consumers intent on ensuring they spend their money wisely when buying something as costly as a car.

Shortly after the 2005 Chevrolet Cobalt was introduced, for intance, the New York Times ran an article in which the reviewer explained how a Cobalt his wife was driving stalled when her knee bumped the key ring. After that story ran, another reporter, Christopher Jensen of the Cleveland Plain-Dealer, called General Motors (GM) to ask if they had anything to say about such a bug. GM issued a statement explaining that, under rare circumstances, bumping the key ring could cause the engine to shut down — but it wasn’t considered a safety problem.

“It is pretty funny to hear somebody pretend that turning off the engine by mistake isn't a safety issue,” Jensen wrote. That was nearly 10 years before GM initiated a vast recall relating to the very same problem.

Google (GOOG) existed back then, which means anybody considering buying a Cobalt could have found the Times or Plain-Dealer articles, or others like them. Apparently many didn’t bother. The Cobalt, which GM sold from 2005 to 2010, got middling reviews at best, yet consumers purchased several million of them, plus hundreds of thousands of similar Pontiac and Saturn models. While it wasn’t clear back then that the ignition defect would pose a deadly safety problem, it wasn’t hard to figure out the Cobalt and its cousins were duds.

Fatal consequences

The Cobalt ended up having much bigger problems, of course, and is now the focus of a safety scandal involving more than a dozen fatal crashes and somewhere between 12 and 75 deaths.  Wednesday's report  by former prosecutor Anton Valukas finds that a “history of failures” at GM led the automaker to repeatedly ignore signs of a deadly problem and dither for a decade before issuing a recall. While the report absolves GM’s current CEO, Mary Barra, of any direct knowledge of the problem until late last year, it identifies several other executives who could have intervened but didn’t. And even though GM ordered the Valukas investigation, his report reveals numerous oversights that had deadly consequences and could add to a GM legal bill that’s already sizable.

Like every automaker hyping a new model, GM portrayed the Cobalt as a must-have vehicle when it introduced it late in 2004 (as a 2005 model). By then, GM had grudgingly acknowledged that the small cars in its lineup, such as the Chevy Cavalier and the Pontiac Sunfire, were dogs it spent little money to develop and produced mainly to earn gas-mileage credits from the government. GM earned virtually all its profits on pickup trucks, SUVs and large sedans. But with gas prices rising, GM needed better small cars able to compete with models such as the Honda Civic and Toyota Corolla and draw younger buyers who might someday trade up to higher-priced GM offerings.