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GM chief grilled over recall delay

Product RecallsBusinessGeneral MotorsMary BarraManufacturing and EngineeringAutomotive EquipmentFinancially Distressed Companies

General Motors Chief Executive Mary Barra on Tuesday vowed to find out whether GM engineering employees executed a coverup or were merely incompetent in failing to recall a defective part linked to 13 deaths.

Testifying before a House Energy and Commerce Committee panel, Barra said an independent investigation she ordered should provide that answer and explain why the company waited years to fix a faulty ignition switch in multiple models.

GM only recently recalled 2.6 million vehicles to fix the switch even though the automaker learned of the problem more than a decade ago.

The fix took "way too long," she told lawmakers. "We will make changes and we will hold people accountable."

But Barra — a lifelong GM employee named to head the automaker in January — repeatedly deflected questions about a coverup and provided no specifics about who nixed the recalls and why. She said the automaker has hired former U.S. attorney Anton "Tony" Valukas to lead an inquiry to find those answers.

Previously Valukas investigated the collapse of investment bank Lehman Bros. in 2008.

David J. Friedman, the acting administrator of the National Highway Traffic Safety Administration, followed Barra at the hearing and was immediately challenged by panel members asking why the agency didn't force a recall years ago.

Friedman said his agency conducted a proper review of the available data it had about crashes involving the vehicles. He said GM withheld key information that might have led NHTSA to force earlier recalls.

"Our ability to find defects also requires automakers to act in good faith and to provide information on time," Friedman said.

He noted that GM now has provided the agency with new information "definitively linking" the faulty ignition switch with the failure of air bags to deploy in accidents and other data. The agency is investigating whether GM withheld information it was required by law to provide to regulators, he said.

The recalled models included 2003 to 2007 Saturn Ions, 2007 to 2010 Saturn Skys, 2006 to 2011 Chevrolet HHRs, 2006 to 2010 Pontiac Solstices, and 2005 to 2010 Chevrolet Cobalt and Pontiac G5 models.

Barra conceded many of the lawmakers' criticisms and apologized to crash victims and their families. She called documents that showed the automaker resisted recalling the cars because of cost issues "disturbing."

"That is not acceptable," Barra said. "Today ... if we know that there is a safety defect on our vehicles, we don't look at the cost but at the speed at which we can fix the problem."

The ignition switch in this case can unintentionally turn off the vehicle and disable key functions, including the air bags that protect occupants in crashes.

Rep. Tim Murphy (R-Penn.) asked whether GM purposely withheld information about problems with the ignition switch and other safety issues when it was negotiating the terms of its bankruptcy and federal bailout in 2009.

Barra said she was not aware of any effort to hide information about potential liabilities, "but I can't speak to every single person."

Rep. Joe Barton (R-Texas), an industrial engineer, asked Barra why the company used an ignition switch that did not meet company specifications.

"Why in the world would a company with the stellar reputation of General Motors purchase a part that did not meet its own specifications?" he said.

Barra responded: "I want to know that as much as you do."

When pressed on whether GM now would purchase parts that don't meet specifications, Barra said in some cases it would if the part meets safety, functionality and durability standards among others.

Barton called that answer "gobbledygook."

"That's not an acceptable answer for the American people," he said. "There shouldn't be a part used in any GM product ... that doesn't meet the specifications."

Barra's apologies notwithstanding, GM legally shed responsibility for crashes before the bankruptcy. The restructuring created a new company, which bought the assets of the old GM, but allowed it to get rid of debts and legal liabilities.

During more than two hours of testimony, Barra hinted GM might compensate victims and their families in connection with recall-related accidents that took place before the bankruptcy.

"We do understand we have civic responsibilities as well as legal responsibilities," she said when asked about how the company would handle pre-bankruptcy crashes.

Barra said the company has hired Kenneth Feinberg as a consultant to explore options for the families of victims of accidents caused by the defective part. She plans to meet Friday with Feinberg, a Washington-based lawyer who has become the go-to guy for mass-dispute resolution. But Barra added that GM hasn't made a decision on a compensation fund.

Feinberg is known for handling the federal payouts after the Sept. 11 terrorist attacks, meeting with 900 families that lost a loved one and doling out $7 billion. Feinberg has also handled victim payouts for other high-profile cases, including the Boston Marathon bombings, the Virginia Tech campus shooting, the Deepwater Horizon explosion in the Gulf of Mexico, and a lawsuit involving Vietnam veterans' exposure to Agent Orange.

"My mandate from the company is to consider the options for dealing with issues surrounding the ignition switch matter, and to do so in an independent, balanced and objective manner, based upon my prior experience," Feinberg said.

Barra was asked at a news conference after the hearing whether she was angry she had to deal with a controversy that took place years before she became CEO.

"It angers me that we had a situation that took over a decade to correct, and I am working day and night to make sure that we correct this issue, we learn from it, and it never happens again," Barra said.

GM also faces investigations by NHTSA and the Justice Department into why it did not recall the vehicles sooner.

Before the hearing, families of victims sharply criticized the automaker for delays in recalling the vehicles and called for legislation to prevent a repeat of the situation.

"I feel that GM needs to be held accountable to the public for the deadly and tragic consequences allowing these deadly switches to be used," said Terry DiBattista of Conway, S.C., whose daughter Amber Marie Rose was killed in a 2005 accident after the air bags in her Chevrolet Cobalt failed to open.

Barra met with the families Monday night and told them she couldn't change what happened but was looking into why it took so long to recall the vehicles, said Ken Rimer of Hammond, Wis. His daughter, Natasha Weigel, died from injuries sustained in a 2006 crash in a Cobalt.

Rimer said he and his wife, Jayne, wanted to meet Barra so she could put their faces to the accident.

"When you hear the tragedy of all these poor kids who are not with us anymore," Rimer said, "it did bring a tear to her eye."

jerry.hirsch@latimes.com

jim.puzzanghera@latimes.com

Copyright © 2014, Los Angeles Times
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Product RecallsBusinessGeneral MotorsMary BarraManufacturing and EngineeringAutomotive EquipmentFinancially Distressed Companies
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