Barra: Poor Decisions in Past Do Not Reflect the GM of Today
General Motors CEO Mary Barra on Tuesday told a congressional subcommittee investigating a widening recall that while she could answer few specific questions about what happened, decisions made in previous years not to address the situation do not reflect GM’s current culture.
Barra, who has been CEO for less than three months, told the House Oversight and Investigations Subcommittee that even she was troubled by reports that GM officials considered but rejected a solution to an ignition switch problem because of the “lead time required, cost and effectiveness.”
“I found that statement to be very disturbing,” said Barra. “That is unacceptable. That is not how we do business in today’s GM.”
With Barra facing the glare of a congressional investigation for the first time, however — and with the company’s resurgent post-bankruptcy profits and reputation on the line — there was little she could tell members why it took GM more than a decade to link ignition switch issues with air bag deployment.
She revealed to the subcommittee that GM has hired Kenneth Feinberg, an attorney who helped settle victims’ claims from the World Trade Center attacks of Sept. 11, 2001; the BP Gulf Coast spill and the Boston Marathon bombing, to help chart a path forward in how GM could address consumer claims.
Over the past two months, GM has recalled 2.2 million Chevrolet Cobalts, Saturn Ions and similar vehicles, saying switches can be inadvertently jostled out of position, potentially disabling air bags in the event of a crash. The company has linked the defect to 13 deaths and 31 crashes.
After hearing from Barra, the subcommittee was set to question David Friedman, the acting head of the National Highway Traffic Safety Administration about why federal regulators didn’t act sooner. Friedman said in prepared testimony that GM withheld information from it that might have allowed it to pursue a recall at an earlier date — even though NHTSA in 2007 and 2010 considered opening probes.
Committee members hammered away at Barra on information that the supplier of the switch, Troy, Mich.-based Delphi, told GM as early as 2002 that the switches did not meet the company’s specifications yet it still accepted them.
“Why in the world would a company (like GM) purchase a part that did not meet its own specifications?” asked U.S. Rep. Joe Barton, R-Texas.
“I want to know that as much as you do,” Barra responded, saying it’s part of the company’s own internal investigation, led by former U.S. Attorney Anton Valukas. “It’s not how we do business today.”
During part of her testimony, however, Barra suggested that there are circumstances where a part or product doesn’t necessarily have to meet every specification to be useable by GM, an answer Barton called “gobbledygook.”
Members also questioned why an engineer at the company, identified in documents released by the committee from Delphi as Ray DeGiorgio, signed off on a change in 2006 to the ignition switch, apparently without the knowledge of others at GM. Members also questioned why no one at the company has been laid off because of the widening recall.
While much of the questioning was polite, it was also dogged. Members of both parties continued to ask how GM — knowing there were issues with ignition switches as early as 2001 and preproduction of the Saturn Ion and even approved a change to those switches in 2006 — could have taken so long to order a widespread recall.
“Documents produced to the committee show that both NHTSA (the National Highway Traffic Safety Administration) and GM received complaints and data about problems with ignition switches and air bags. The complaints go back at least 10 years,” said U.S. Rep. Fred Upton, R-Mich., who chairs the full House Energy and Commerce Committee.
“A small spring inside the switch — a piece that cost pennies — failed to provide enough force, causing the switch to turn off when the car went over a bump,” added U.S. Rep. Diana DeGette of Colorado, the ranking Democrat on the subcommittee. “GM knew about this problem in 2001. They were warned again and again over the next decade but did nothing.”
Earlier in the day, the families of people who lost loved ones in crashes involving the recalled vehicles held a news conference, asking that GM take all the cars off the road until they are fixed; GM has said they are safe to drive as long as drivers take all the weight off the keychain.
The company has also agreed to provide loaners if drivers are nervous about the vehicles. To date, some 13,000 loaners have been provided, Barra said.
New parts are supposed to become available this month with Delphi expected to add a third shift at a Mexican facility to produce them. But committee members said they still have concerns, especially because Delphi officials told staff investigators that even after the 2006 change, the parts did not meet specifications.
“There’s a difference between a part that does not meet specifications and being defective,” said Barra.
Feinberg, meanwhile, could help the company determine what to do regarding potential claimants. GM is generally protected from liability claims for incidents before it went through bankruptcy in July 2009. That protection, however, could be limited if it can be shown GM officials knowingly hid the defects.
Families of those losing their lives have asked that a victims fund be established. GM has remained silent on that subject, but Barra said Feinberg will help “assess the appropriate next step.”
“We understand we have civic responsibilities as well as legal responsibilities,” she said.
This article appeared in print on page 10 of edition of Hamodia.
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