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Lawmaker: GM response to ignition switch issue 'smacks of cover-up'

Product RecallsGeneral MotorsLaws and LegislationMary BarraManufacturing and EngineeringAutomotive EquipmentDiana DeGette
House panel wants to know if GM covered up ignition switch issue
House panel ask if GM switch issue represents 'malfeasance or incompetence'

Lawmakers expressed skepticism over General Motors' claims that its failure to quickly recall cars with an ignition switch issue linked to more than 50 crashes and at least 13 deaths was a result of mere incompetence.

During a hearing of a House Energy and Commerce Committee subcommittee Wednesday the lawmakers said they found GM's internal report on the recall delay deeply troubling and that it failed to answer all their questions about why the company didn't act for years to fix the ignition switch problem in the Chevrolet Cobalt and other small cars.

“The report singles out many individuals at GM who made poor decisions or failed to act, but it doesn't identify one individual in a position of high leadership who was responsible for these systemic failures,” Rep. Diana DeGette (D-Colo.) told GM Chief Executive Mary Barra. “The report absolves previous CEOs, the legal department, Ms. Barra and the GM Board from knowing about the tragedy beforehand. But that is nothing to be proud of.”

Rep. Tim Murphy (R-Pa.), chairman of the subcommittee, asked whether GM employees tried to hide information about the ignition switch.

“I find it hard to believe that out of 210,000 employees not a single one stood up and said, 'I think we are making a mistake here,' “ he said.

Murphy said, “Perhaps this report should have been subtitled, 'Don't assume malfeasance when incompetence will do.'”

Added Rep. Phil Gingrey (R-Ga.), “That smacks of a big cover-up to me.”

In their testimony, both Barra and former U.S. Atty. Anton Valukas, the author of GM’s internal report, said they had no evidence of employees attempting to cover up the ignition switch issue.

“What we looked for was any evidence that an individual knew that they had a safety issue and took steps to conceal that,” Valukas said. “We did not find that.”

Nonetheless, “The story of the Cobalt is a story of individual and organizational failures that led to devastating consequences,” Valukas said.

In her testimony Barra conceded that GM failed to handle the issue “in a responsible way” and that GM was now engaged in the “most exhaustive, comprehensive safety review” in its history.

“This isn't just another business challenge. This is a tragic problem that never should have happened. And it must never happen again,” Barra said.

Energy and Commerce Committee Chairman Fred Upton (R-Mich.) emphasized that his panel's investigation into why GM waited years to recall 2.6 million small cars with the defect was still going on. The ignition switch in those cars could shift off suddenly, disabling crucial safety functions such as air bags.

“The system failed and people died and it could have been prevented,” he said, describing the report as “deplorable, disturbing and downright devastating.”

The report found a pervasive atmosphere of incompetence and neglect that led the company to allow the problem to fester for at least 11 years. The inquiry was based on hundreds of interviews and more than 41 million documents.

“There is no way to minimize the seriousness of what Mr. Valukas and his investigators uncovered,” Barra told the House panel. “I think the Valukas report was comprehensive and very far reaching.”

This is the second time Barra has testified before the panel. During her first appearance, Barra deflected many of the lawmakers' questions, saying she hoped to discover answers from the internal probe conducted by Valukas.

Much of the questioning Wednesday centered on how to change GM’s culture so that employees point out safety issues and take responsibility for correcting them.

GM has a “culture that encourages people not to stick their necks out and report things,” DeGette said.

Barra said she understood the skepticism.

“I know some of you are wondering about my commitment to solve deep underlying cultural problems uncovered in the report. The answer is simple: I will not rest until these problems are resolved. As I told our employees, I'm not afraid of the truth. And I'm not going to accept business as usual at GM,” Barra said.

Barra also listed the changes underway at the automaker.

“We are bringing greater rigor and discipline to our analysis and decision-making process regarding recalls and other potential safety-related matters,” Barra said.
It has hired a global safety chief and 35 more investigators, she said.

The automaker is now encouraging employees to point out safety issues in an attempt to change a culture that previously let problems pass without workers taking responsibility, Barra said.

GM released Valukas' findings this month and subsequently fired 15 people, including the engineer responsible for the switch design and subsequent changes. Five additional GM employees were disciplined.

“As I go through this it looks like a lot more than 15 people should have been terminated,” said Rep. Michael Burgess (R-Texas).

The automaker faces ongoing investigations by the National Highway Traffic Safety Administration, the Justice Department and Congress into why it delayed fixing the cars for so long.

The crisis prompted GM to change its process for determining when vehicles should be recalled. That set off a wave of recalls by GM and other automakers that feared they would be caught not reacting quickly enough to safety problems.

GM has issued 44 recalls this year covering 17.7 million vehicles in the U.S. The auto industry as a whole has recalled 29.1 million vehicles this year, almost 50% more than it called back in the U.S. in all of last year. It is on pace to break the record of 30.8 million recalled vehicles set in 2004.

Hirsch reported from Los Angeles, Puzzanghera from Washington.

Follow me on Twitter @LATimesJerry.

Copyright © 2014, Los Angeles Times

UPDATE

9:15 a.m. PDT June 18: This post has been updated with additional comments from lawmakers and GM Chief Executive Mary Barra.

This post was originally published at 8:42 a.m.

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Product RecallsGeneral MotorsLaws and LegislationMary BarraManufacturing and EngineeringAutomotive EquipmentDiana DeGette
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