General Motors CEO Provides Few Details In Appearance Before Congress
Wed, Apr 2 2014
On Tuesday, Barra returned to the Capitol under more strained circumstances.
For more than two contentious hours, she took questions from members of a House of Representatives subcommittee investigating General Motors years-long delay in initiating a recall of millions of vehicles that contained a defect that has killed at least 13 people.
Why did GM accept faulty ignition switches that were below the company's set specfications? Why did GM learn about the problem in 2001 yet take no action until 2014? Will GM compensate victims' families even though the company's bankruptcy may limit its liability?
Those were a few of the questions members of the House Oversight and Investigations Subcommittee asked. Few concrete answers were forthcoming. For her part, Barra sidestepped most of the questions, saying she wouldn't have information needed to answer them until an internal review is completed. David Friedman, the administrator of the National Highway Traffic Safety Administration, testified after Barra.
The biggest news that emerged from the hearing was that General Motors has retained attorney Kenneth Feinberg to advise the company on its civil and legal responsibilities. He has made a career of resolving disputes and serving in a 'fixer' role, serving as the chief of the federal government's September 11th Victim Compensation Fund, as an administrator of compensation fund for victims of the BP Deepwater Horizon disaster and a similar fund for victims of the Boston Marathon bombing. Barra, who has been GM's CEO since January but been with the company since 1980, expects to meet with Feinberg on Friday, and have a concrete plan within the next 30-60 days.
Yet Barra would not say for certain Tuesday that GM would compensate the victims at all. Despite repeated questions from Rep. Diana DeGette (D-Colo.), Barra did not outline the company's intentions.
"I assume GM is hiring (Feinberg) to help identify the size of claims and then compensate the victims? Is that right," DeGette asked. "Is GM willing to put together some kind of a compensation fund for these victims that Mr. Feinberg will then administer?"
"We've hired him to help assess the situation," Barra replied.
"So really, there's no money involved at this point," DeGette asked.
"We have just hired him and will begin work with him Friday," Barra said.
"So really, you hired him and announced it today, but he has no ability to compensate victims," DeGette asked.
"We will work with him to determine what the right course of action is," Barra said.
"Might that include victim compensation?" DeGette asked.
"We haven't made any decisions on that," Barra said.
Verbal volleys like these went back and forth all afternoon, with Barra largely saying she needed to consult with Feinberg or wait until a final report from former U.S. attorney Anton Valukas is produced before she can provide specifics to the committee or a worried public. But little headway was made.
For all GM's statements about transparency since the ignition-switch recall began in February, it was difficult to find tangible evidence of that Tuesday. When asked by Rep. Peter Tonko (D-N.Y.) whether GM would share Valukas' full report with both the subcommittee and public, Barra would only say that GM would share what was "appropriate."
Family members of the 13 victims killed in defective cars sat in the rear of the chambers Tuesday, many either holding pictures of their loved ones or placing the pictures along a rear mantle. Earlier in the day, they stood outside the Capitol building and asked that Congress hold General Motors accountable for its failure to recall the vehicles in a timely manner. Documents released by the committee earlier this week showed that in March 2005, GM cited "tooling cost and piece price are too high" as reasons to avoid fix the part. On Tuesday, Sen. Ed Markey (D-Mass.) said the per-vehicle costs associated with the fix were about $2.
"Rather than fixing the problem, they chose to keep producing the Cobalt with the ill-fated ignition switch and selling it to an unsuspecting public," said Ken Rimer, the stepfather of Natasha Weigel, who died from in a Cobalt crash on Nov. 4, 2006. "Needless deaths and injuries, especially when an inexpensive and easy fix was available, should not be the cost of doing business to auto manufacturers."
Barra is scheduled to testify in another hearing related to the ignition-switch defect Wednesday. The Senate Commerce Committee hearing begins at 10 a.m. On Thursday, GM is scheduled to submit its written responses to the National Highway Traffic Safety Administration for another related investigation.
This story first appeared on Autoblog.com
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