CEO Barra calls GM’s actions on deadly defect ‘unacceptable’ – Reuters

Posted: Wednesday, April 02, 2014

WASHINGTON (Reuters) – General Motors Co CEO Mary Barra on Tuesday called her company’s slow response to at least 13 deaths linked to faulty ignition switches “unacceptable,” but could not give U.S. lawmakers many answers as to what went wrong as she pointed to an ongoing internal investigation.

After taking an oath administered by House Energy and Commerce Oversight and Investigations Subcommittee Chairman Tim Murphy, Barra kicked off the contentious hearing by declaring, “I am deeply sorry” for the company’s failure to respond quickly to the safety problem and subsequent deaths.

Representative Henry Waxman, a veteran Democrat who has spearheaded past attempts to tighten U.S. laws on automotive safety, bluntly told Barra: “Because GM didn’t implement this simple fix when it learned about the problem, at least a dozen people have died in defective GM vehicles.”

GM first learned of a problem with its ignition switches on Chevrolet Cobalts, Saturn Ions and other models in 2001, documents have shown, but took no steps to recall any cars until this past February.

Lawmakers are investigating why GM and regulators missed or ignored numerous red flags that faulty ignition switches could unexpectedly turn off engines during operation and leave airbags, power steering and power brakes inoperable.

The unflappable Barra repeatedly told the committee that GM was now doing a better job of overseeing the quality of its products.

She also announced that GM had retained Kenneth Feinberg, who recently oversaw the BP oil spill fund, as a consultant. Feinberg will also gauge possible responses to families of those injured or killed in crashes involving now-recalled cars, Barra said.

This was the first time that any GM executive has hinted at the possibility of a victims’ compensation fund, as many consumer groups and Democrats in Congress are urging.

Barra, however, stressed that it could take up to two months before GM makes any decision on that.

The drama inside the packed hearing room – named the “John D. Dingell” room after the Michigan Democrat with a long history of advocating for GM – was heightened by photos of victims, which were displayed against one of the walls.

Some victims were from home states of members of Congress serving on the committee holding Tuesday’s hearing.

Republicans and Democrats on the panel, who usually are at odds on most issues they consider, were united in aggressively challenging Barra and her company’s performance.

House Energy and Commerce Committee Chairman Fred Upton, a Republican, told Barra: “With a two-ton piece of high-velocity machinery, there is zero margin for error; product safety is a life or death issue. But sadly, vehicle safety has fallen short.”

Barra, who became CEO in January, calmly reiterated that the issue of defective ignition switches only came to her attention on January 31 of this year.

She had few answers for lawmakers wanting to know who made the decision to quietly revise the design of the faulty switch in 2006, and why GM did not take more seriously dozens of reports of keys unintentionally moving to the “off” position, sometimes at high speeds.

Barra said she will learn more from an internal probe led by Anton “Tony” Valukas, who chairs the law firm Jenner & Block.

“We will learn from this and we will make changes and we will hold people accountable,” she said.

Under intense grilling by lawmakers, Barra said she found employee statements “disturbing” that cost considerations may have discouraged the prompt replacement of faulty ignition switches now linked to at least 13 fatalities and the recall of 2.6 million vehicles.

“I find that statement to be very disturbing. As we do this investigation and understand it in the context of the whole timeline – if that was the reason the decision was made, that is unacceptable. That is not the way we do business in today’s GM.”

On one of the most sensitive issues in the congressional investigation of GM, lawmakers asked Barra why the company would have included ignition switches in its cars even though they did not fully meet the company’s specifications, as revealed in documents handed over to lawmakers this week.

“There is a difference between a part not meeting specifications and it being defective,” Barra responded.

When pressed on whether the switch was acceptable from a safety and functionality perspective, Barra said: “As we clearly know today, it is not.”

(Additional reporting by Julia Edwards, writing by Richard Cowan; editing by Karey Van Hall, Tom Brown and G Crosse)


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