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Tue April 1, 2014
GM CEO Barra Is Grilled Over Handling Of Ignition Switch Defect
Originally published on Tue April 1, 2014 6:15 pm
In a hearing before the House Oversight and Investigations panel, GM CEO Mary Barra and National Highway Traffic Safety Administration Acting Administrator David Friedman testify Tuesday on concerns surrounding GM's recall of a faulty ignition switch that's been linked to more than a dozen deaths.
The recall, which now includes more than 2 million vehicles, will be the focus of today's hearing by the House Energy and Commerce Committee's Subcommittee on Oversight and Investigations. The event's title hints at lawmakers' frustration, and the grilling that awaited Barra: "The GM Ignition Switch Recall: Why Did It Take So Long?"
We'll update this post with news from the hearing. Barra, who rose to GM's top job in January, is scheduled to testify on Capitol Hill for two days. Friedman was appointed NHTSA's acting chief after the resignation of David L. Strickland in December.
Update at 5:35 p.m. ET: Questions About NHTSA and GM
Rep. Phil Gingrey, R-Ga., quotes a July 2013 NHTSA email that says GM had been more difficult to deal with than other carmakers. Gingery read aloud the note from the head of NHTSA's Office of Defects Investigation to an official at GM:
"The general perception is that General Motors is slow to communicate, slow to act, and at times requires additional efforts from ODI that we do not feel is necessary with some of your peers."
He later asks Friedman if his agency did enough to get the information it needed to investigate the cars' safety.
"I believe that the reason we didn't move forward was that the data indicated that the Cobalts didn't stand out" from other vehicles and the agency didn't have "conclusive" information, Friedman said.
Friedman later said his agency is conducting an active investigation into whether GM followed the law.
Update at 5:05 p.m. ET: About Trends And Safety Data
Under questioning by Rep. Fred Upton, R-Mich., NHTSA's Friedman says the agency is using tools derived from IBM's Watson supercomputer to help it see trends in data that could indicate a safety defect in passenger vehicles.
Asked what he would have wanted to know from GM 8-10 years ago, Friedman says it includes "information that they had changed parts on the ignition switch," and conversations that seemed to suggest GM was concerned about the algorithm that controls airbags in the vehicles in question.
"It's my understanding that none of that information was available," he said.
Update at 5 p.m. ET: 'Connecting the Dots' On Airbags and Switches
Rep. Diana DeGette, D-Colo., asks Friedman what he meant when he said recently that GM had information that would have helped the safety agency realize the magnitude of the problem. She is concerned that no one was able to "connect the dots" and take action.
The acting chief answers that he was referring to the chronology of changes and events at GM, citing information about a new part, conversations between GM and its suppliers about the airbags, and a connection the carmaker knew about between the airbag and the switch.
"We're getting hundreds of thousands of documents from GM," Friedman says, noting that the company has a deadline to deliver the documents this week.
Update at 4:55 p.m. ET: Murphy Faults NHTSA's Website
"Can you fix this website" to help consumers, panel chairman Rep. Tim Murphy, R-Pa., asks NHTSA's acting chief David Friedman, referring to a screenshot of the agency's site, which provides what he calls a minimum of information.
Murphy then asks Friedman why NHTSA had failed to take action on GM after the agency's employees "raised the red flag on this."
Murphy is specifically asking about the GM cars' failure to deploy their airbags.
Friedman says the situation was complicated by the circumstances around some of the crashes, such as passengers who didn't have safety belts on, or vehicles that were in off-road conditions.
He says that "roughly half" of cases move forward after initial concerns are brought up about a car's safety.
Update at 4:45 p.m. ET: NHTSA Acting Administrator David Friedman
In his opening statement, Friedman says of families of crash victims, "I am deeply sorry for their loss."
Friedman, who was appointed the agency's acting chief after the resignation of David L. Strickland in December, notes that the agency has worked to get highway fatality rates down to "historic lows not seen since 1950."
As for GM, he says that NHTSA's priority is to ensure the company is doing all it can to tell consumers how to keep themselves safe, and to see whether the carmaker did everything it was required to do to help maintain safety standards.
And Friedman says NHTSA is retooling some of its methods and protocols in the wake of the ignition switch issue. He also gives a quick overview of some of the agency's findings about the Cobalt and possible safety concerns dating back several years, saying that the data didn't form trends indicating problems with the car.
Update at 4:38 p.m. ET: Barra Has Finished Testimony
The panel has ended today's questioning of Barra; up next will be NHTSA's acting leader David Friedman.
Update at 3:55 p.m. ET: GM Would Not Share Full Report
Rep. Paul Tonko, D-N.Y., asks Barra if she will share the full report of the investigation GM has commissioned – an inquiry that she has mentioned several times in promising to get to the bottom of issues behind the recall.
Barra refuses to commit to doing that.
"We will share what's appropriate," Barra says repeatedly, after Tonko asks her for a commitment to sharing the full report with the government and the public.
The full report would potentially come from former U.S. Attorney Anton Valukas, whom GM hired "to conduct a thorough and unimpeded" investigation, Barra said in her written testimony today.
Side note: Unless we've missed it, today's hearing has lacked mention of two former GM leaders: former CEOs Dan Akerson, who served from 2010-2014, and Rick Wagoner, who served from May 2003 to 2009. It was Wagoner, you may recall, who retired from the post as part of the federal auto industry bailout.
Update at 3:40 p.m. ET: 'Does GM Accept Responsibility?'
Rep. Jan Schakowsky, D-Ill., says she is "underwhelmed" by GM's move to hire a car safety expert. Then she inquires about GM's potential liability in the deaths of people whose accidents have been linked
Schakowsky asks: "Does GM accept responsibility for the accidents caused by the company's defective vehicles?"
"I again want to reiterate, we think the situation is tragic, and we apologize for what has happened," Barra says. But she stops short of saying yes, instead saying that the company is investigating the incidents.
Schakowsky had earlier noted that GM, because of its declaration of bankruptcy, could potentially elude liability for any accidents the cars' problems might have caused before it emerged from bankruptcy, because it became "new GM" in the summer of 2009.
Update at 3:20 p.m. ET: The Victims And Their Families
Rep. Bruce Braley, D-Iowa, notes the prominent row of photos brought into the chamber and displayed by family members of people who died in accidents that have been linked to the defect. They remind him of people in his family, Braley says.
Holding up an old promotional pen bearing the motto, "Safety comes first at GM," Braley asks Barra, "What's changed at GM?"
The CEO responds by saying the company has adopted new core values in the wake of the recall and safety issues.
That prompts a call for GM to submit its new values, and the values it has embraced for the past 20 years.
Update at 3:15 p.m. ET: GM's Inquiry Into Recall
New information from today's hearing includes the announcement from Barra that GM has hired compensation expert Kenneth Feinberg, who has worked on large-scale events from 9/11 to the BP Gulf of Mexico oil and Boston Marathon, to look at how the company can respond to families who lost loved ones in accidents.
"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 in a media release about the move.
Update at 2:57 p.m. ET: About Those GM Records
Murphy asks Barra if she reviewed the documents GM provided to the committee.
"No I did not. There was over 200,000 pages," she answers.
Update at 2:50 p.m. ET: About The Replacement Part
Rep. Fred Upton R-Mich., asks who decided not to use a new part number for a replacement part for the faulty switch, a move that could have been motivated by an attempt to not draw attention to the problem.
Barra says she doesn't know the person's name, calls it "an unacceptable practice."
Update at 2:45 p.m. ET: DeGette Refers To Several GM Documents
Rep. DeGette, D-Colo., cites documents she says GM provided to NHTSA, seeking to get clarification from Barra about when the company knew that the switches were defective.
Barra responds by saying she is trying to determine that, by ordering an investigation.
"You don't know when GM knew about the defect?" DeGette asks.
The rest of their exchanges follow a similar pattern, as DeGette, in a common theme in hearings when committee members have only five minutes to ask questions, seeks yes-or-no answers from Barra. The CEO maintains that she has ordered an inquiry.
Update at 2:35 p.m. ET: Murphy Questions Barra
Rep. Tim Murphy, R-Pa., begins by asking Barra about a problem GM had with getting parts to meet specifications. Barra says there is a difference between meeting specifications and being defective.
Murphy responds by asking if the ignition switch acceptably met specifications.
"As we clearly know today it's not," Barra answers.
Further questions, including one that cited an email in which a technician said the Cobalt car "is blowing up in their face, in regards to turning the car off with the driver's knee" met with Barra's response that she has ordered an investigation into how the switch defect was handled.
Update at 2:25 p.m. ET: Opening Remarks Conclude
Rep. Fred Upton R-Mich., says it's "déjà vu all over again," comparing the current recall to the Ford/Firestone SUV tire controversy of the late 1990s and early 2000s, which also included a recall.
Upton is one of several House members to cite "déjà vu" and the Ford SUV case in their opening remarks.
Rep. Henry Waxman, D-Calif., cites GM warranty claims data his office released today, which shows "133 cases between June 2003 and June 2012 where customers reported issues related to the ignition switch shutoff to dealers and GM service technicians."
He also says NHTSA was "operating under a handicap" in looking at safety in the GM cars, as the automaker didn't share enough information.
Shortly thereafter, Barra is sworn in to testify.
Our original post continues:
Barra has asked former U.S. Attorney Anton Valukas to investigate her company's handling of the defect and the ensuing recall. In her written testimony, which GM posted online Monday, Barra tells the panel:
"When we have answers, we will be fully transparent with you, with our regulators, and with our customers.
"As soon as l learned about the problem, we acted without hesitation. We told the world we had a problem that needed to be fixed. We did so because whatever mistakes were made in the past, we will not shirk from our responsibilities now and in the future. Today's GM will do the right thing.
"That begins with my sincere apologies to everyone who has been affected by this recall...especially to the families and friends of those who lost their lives or were injured. I am deeply sorry."
The GM recall has grown since it was first announced in February. It currently includes models of the Chevrolet Cobalt, Malibu and HHR, the Pontiac G5 and Solstice, and the Saturn Ion and Sky (see the updated list at the GM site).
One person who identified the safety defect was Scott Oldham of Edmunds.com. He described that moment to NPR's Sonari Glinton in a report for Monday's All Things Considered:
"'I remember coming up to a curve, and I moved my foot, and as I moved my foot, my knee kind of pinned this key fob between my knee and the steering column,' Oldham explains. 'And when I hit the brake, my leg moved down. And it basically pulled the key down and shut the car off.'
"The systems that were connected to the engine just stopped working.
"'There was this moment of panic where I said, "Oh my God, the steering isn't working," he recalls.
"'I got the car slowed down and pulled to the side. Catastrophe was avoided.'"
Last month, Barra offered an apology for GM's mishandling of the crisis, saying that "something went very wrong." The company says that correcting the mechanical problems will cost it hundreds of millions of dollars in repair costs.
For a closer look at the flaw linked to the ignition switch, see our timeline, which tracks a winding sequence of events that date back to 2001.
GM faces a deadline of this Wednesday to answer more than 100 questions about the switch and its actions. Those questions come from the NHTSA, which has said GM didn't provide enough information to the agency about potential safety issues.