GM accused of criminal coverup by U.S. lawmakers
Frustration in Washington over lack of information from GM CEO Mary Barra
Lawmakers on Capitol Hill accused General Motors of a potentially criminal coverup of its defective ignition switches and fumed at the lack of answers from its new CEO during a second day of hearings Wednesday into why GM waited a decade to recall cars with the deadly flaw.
Members of a Senate subcommittee also said GM should tell owners of the 2.6 million cars being recalled to stop driving them until they are repaired. But CEO Mary Barra gave assurances that the cars, mainly Chevrolet Cobalts and Saturn Ions, are safe to use while owners wait for the replacement part, saying she would let her own son get behind the wheel if he took certain precautions.
GM has linked the switch to 13 deaths and dozens of accidents. Others, including relatives of some victims, have a higher count of fatalities.
The automaker has said the ignition switch can move from the "run" position to the "accessory" position because of weight on the key chain. That causes the engine to shut off, disabling power steering, power brakes and the front air bags.
Barra points to internal GM investigation
As she did Tuesday at a House hearing, Barra said many of the answers Congress is seeking will come out in an internal GM investigation that should be completed in 45 to 60 days. She also said she was unaware of certain details about GM's handling of the problem — an assertion that frustrated some of the senators.
"You don't know anything about anything," Sen. Barbara Boxer, D-Calif., bristled.
Barra also tried to assure lawmakers that GM is now more focused on safety and the consumer. Few sounded convinced.
"If this is the new GM leadership, it's pretty lacking," Boxer said.
Senators aggressively questioned Barra about how GM approved a replacement switch in 2006 but never changed the part number. Failing to change the number makes the part harder to track. In this case, anyone investigating the cars wouldn't know why earlier switches were failing at a higher rate than later ones.
Part number mystery
While Barra called the failure to change the part number "unacceptable," several members of the panel implied that it was done intentionally by a person or group within the company.
"I don't see this as anything but criminal," said Sen. Kelly Ayotte, R-N.H., a former prosecutor.
Sen. Richard Blumenthal, D-Conn., who is also a former prosecutor, told Barra that the more he learns about GM, "the more convinced I am that GM has a real exposure to criminal liability."
The Justice Department is conducting a criminal investigation of GM's handling of the recall. Barra promised the company will co-operate.
Barra said the company has not yet fired any employees in connection with the recall. But she said if inappropriate decisions were made, GM will take action, including firing those involved.
"It's my understanding that we did not have that information," Friedman said. In one example, GM didn't tell the agency that the switches didn't meet the company's specifications, he said.
GM culture under scrutiny
As she began her testimony, Barra faced an angry and skeptical Sen. Claire McCaskill, the head of the subcommittee, who recounted the story of a woman who died in an accident involving a faulty switch.
McCaskill said GM had "a corporate culture that chose to conceal rather than disclose."
McCaskill also dismissed Barra's claim that there is a new culture at GM. She said that when emerging from bankruptcy in 2009, GM had ample time to recall cars with the faulty switch.
GM did not begin recalling the vehicles until February.
Blumenthal said GM should immediately tell owners of the recalled cars not to drive them until they're repaired because they're unsafe. GM plans to begin repairing the cars this month but has said it might take until October to get them all fixed.
Committee members questioned Friedman about why the agency didn't investigate the cars based on the information it did have. At one point, Rep. Barton was incredulous when Friedman acknowledged that NHTSA didn't fully understand how the air bags in some of the GM cars worked.
Some current GM car owners and relatives of those who died in crashes were also in Washington seeking answers. The group attended the hearing after holding a news conference demanding action against GM and stiffer legislation.
Owners of the recalled cars can ask dealers for a loaner vehicle while waiting for the replacement part. Barra said GM has provided more than 13,000 loaners.
Barra announced at the hearing that GM has hired Kenneth Feinberg — who handled the fund for the victims of 9-11, the Boston Marathon bombing and the BP oil spill — to explore ways to compensate victims of accidents in the GM cars. It's an indication that GM is considered some kind of compensation fund for victims, although Barra stopped short of saying that.
Barra is trying to distance the General Motors she now leads from the overly bureaucratic company whose inattention to its customers helped land it in bankruptcy in 2009.
But it's clear from her appearance before Congress this week that she faces a difficult task. Documents submitted by GM ahead of a House subcommittee hearing Tuesday show that cost was a major consideration when the company declined a decade ago to implement fixes to an ignition switch used in small cars.