GM Holds Shareholders’ Meeting; Company May Be Charged With Wire Fraud

DETROIT (Detroit Free Press/TNS) -

General Motors is cooperating with a federal prosecutor looking at whether it committed wire fraud in its response to defective ignition switches now tied to 111 deaths, GM CEO Mary Barra said Tuesday at a shareholders’ meeting.

The Wall Street Journal reported Tuesday that Preet Bharara, U.S. Attorney for the Southern District of New York, is considering whether to charge GM with wire fraud related to last year’s recall of nearly 2.6 million small cars equipped with defective ignition switches.

“We have cooperated fully. We continue to do so,” Barra said. “It is their timeline. Anything else is pure speculation and does no one any good.”

Bharara and the U.S. Justice Department reached an agreement last year with Toyota under which the Japanese automaker agreed to pay $1.2 billion to resolve wire fraud charges in communicating what the government said was misleading information about the safety of millions of vehicles Toyota recalled in 2010.

That was the largest criminal fine ever levied on an automaker in the U.S.

Former Attorney General Eric Holder said the Toyota case would be a model for its newly vigilant approach to automotive safety.

“Other car companies should not repeat Toyota’s mistake,” Holder said at the time. “A recall may damage a company’s reputation, but deceiving your customers makes that damage far more lasting.”

In other issues discussed at the annual meeting, Barra said GM management and leaders of the United Automobile Workers union are meeting regularly to resolve various issues regarding upcoming contract talks with the UAW.

“We have work in front of us to do,” she said. “It’s in the best interest of the industry for us to have an agreement that reflects what is best for the company, shareholders and our employees.”

UAW President “Dennis Williams is on the record as saying a strike represents a failure of both management and union. I agree with him,” Barra said.

Only 34 shareholders attended the meeting.

They voted overwhelmingly for resolutions to keep Deloitte & Touche as GM’s independent auditor, and a second resolution approving the automaker’s executive compensation. Barra’s compensation for 2014 was worth $16.2 million.

Shareholders rejected a proposal to require the company’s chairman to always be a non-GM executive, but 35.1 percent of votes were cast in favor.

They also rejected a proposal that would allow shareholders to concentrate their votes for company directors on one or two candidates. Called cumulative voting, it makes it easier for dissident directors to be elected to the board. Nearly 36 percent of voting shares were cast in support of the proposal.