Lawmakers pressed General Motors Chief Executive Mary Barra on Wednesday to explain what steps it is taking to resolve a safety crisis that forced it to recall 20 million vehicles and also what it is doing to compensate for deaths and injuries related to faulty ignition switches.
Chief Executive Mary Barra, who was grilled by the House Energy and Commerce Committee in April, was back in the hot seat as members reprimanded the No. 1 U.S. automaker for a "culture of secrecy" and criticized a company investigation that found top executives did not know for years about a deadly ignition-switch defect does not absolve them of responsibility.
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Barra told the committee that a GM compensation fund will cover all victims who suffered a serious physical injury, as well as families of victims who died. She said the company maintained 13 deaths were caused by the switch fault, even though one congressman pointed out 15 photographs of fatal victims displayed by family members in the committee room.
She also said the compensation fund would not be capped, but she did not have an estimate of how much victims would receive. She also said claims from GM owners for a loss of value in their vehicles as a result of the 2.6 million recalls would not be part of the compensation fund.
As she spoke, a lawsuit was filed in Riverside, California, seeking compensation for millions of car and truck owners for lost resale value, potentially exceeding $10 billion. The suit says GM hurt customers by concealing known defects and valuing cost-cutting over safety, leading to more than 40 recalls covering more than 20 million vehicles this year alone.
"I want this terrible experience permanently etched in our collective memories," Barra said in prepared remarks to the congressional committee.
"I want this terrible experience permanently etched in our collective memories."
"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.
Ahead of her testimony, family members of victims held a news conference to reiterate their demands for GM to fully compensate victims without caps or time limits and allow victims to reopen closed claims.
“My son is left paralyzed from his bellybutton down. He has a feeding tube. His vision has been impaired because of a broken eye socket,” said Robbie Buzard, whose son Trenton was paralyzed in an accident in 2009 when the Chevy Cobalt he was riding in was hit head-on by a drunk driver outside of Pittsburgh. Trenton's great-grandmother, who was driving, was killed.
“GM needs to accept responsibility for what it’s done and do what’s right.”
Barra reiterated the steps GM has taken based on a report by former U.S. Attorney Anton Valukas, who GM hired to examine how it handled the ignition-switch recall. Barra again called the report "brutally tough and deeply troubling." Among those steps were the firing of 15 GM employees, a restructuring of GM's safety and quality control process and the hiring of attorney and mediation expert Kenneth Feinberg to administer the compensation fund.
In the statement, Barra said that she would not "rest until these problems are resolved."
"As I told our employees, I am not afraid of the truth," she said.
Lawmakers were skeptical, however. Republican Tim Murphy noted that the internal GM investigation concluded there was no coverup or conspiracy.
“But that report should be subtitled ‘don’t assume malfeasance when incompetence will do,’” he said in prepared remarks at the start of the hearing. “We want to know from Ms. Barra not just how it happened, but why.”
Democrat Diana DeGette of Colorado said it is "frankly alarming" that the GM report found that top executives were not made aware of the deadly flaw for years, even though there was widespread evidence among lower-level engineers and lawyers. "This is nothing to be proud of," she said.
She also said GM's "culture of secrecy" must be changed through more than structural management adjustment.
Barra's latest turn in the congressional hot seat comes just days after GM recalled more than 3 million additional vehicles that apparently suffer from a separate ignition defect.
GM has not tied any fatalities to that defect.
-- Reuters, The Associated Press and NBC News reporters Patrick Rizzo and Erik Ortiz contributed to this report.
First published June 18 2014, 4:41 AM