GM CEO Mary Barra, shown with a Chevy Cruze.
General Motors CEO Mary Barra, facing her first major crisis since assuming the top job at the Detroit maker, will face a grilling on Capitol Hill on April 1 as lawmakers asked her to explain the delay in recalling 1.62 million vehicles that have been linked to at least 12 deaths and 31 crashes.
The new chief executive has repeatedly apologized for GM’s handling of the problem, a company timeline indicating the first signs of trouble were reported by an engineer working on the old Saturn Ion sedan in 2001, several years before that now-recalled vehicle even went into production.
Barra is expected to testify on the same day as David Friedman, the acting administrator for the National Highway Traffic Safety Administration. While NHTSA has launched its own investigation of the GM recall, the safety agency has also come under fire from some critics who question whether it failed to take action on its own to force a recall earlier.
“We look forward to hearing from both Mary Barra and Administrator Friedman,” said Rep. Fred Upton, a Michigan Republican who heads the House Energy and Commerce Committee, along with Tim Murphy, a Pennsylvania Republican whose House Oversight and Investigations Subcommittee will handle the April 1 hearing. “Their testimony is critical to understanding what the company and NHTSA knew about the safety problems, when they knew it, and what was done about it.”
(Despite tougher rules, increased pressure, are today’s cars safer? Click Here for the special report.)
The timing of GM’s actions has become a critical issue that is likely to be the centerpiece of separate investigations by both the House and Senate, a probe by NHTSA, and a preliminary criminal investigation launched by the U.S. Justice Dept.
The latter probe is being handled by the same New York-based prosecutor’s office that this week reached a settlement with Toyota Motor Co. in an investigation centered around the Japanese maker’s handling of a series of unintended acceleration recalls in 2009 and 2010. Toyota ultimately agreed to pay a $1.2 billion fine and to continue or expand upon other steps meant to assure it responds quickly to reports of safety issues in the future.
(For more on the Toyota settlement, Click Here.)
Industry and government sources have suggested the Justice Dept. settlement could serve as a model for any eventual deal with General Motors – and other automakers going forward.
As for the April 1 House hearing, Barra could find things doubly tough. Not only could she face a grilling over the handling of the ignition switch problem – but she could wind up taking hits from the GOP majority members who continue to see a political advantage in pointing to the 2009 federal bailout of the then-bankrupt automaker. GM last year severed its ties with the government which sold off the last of its shares in the company – losing about $10 billion in the process.
Barra has taken an out-front approach to handling the recall problem – which involves an ignition switch that can inadvertently shift from On to ACC or Off under certain conditions. That can stall a vehicle’s engine and disable its airbag system, an issue blamed for at least a dozen deaths.
Barra this week issued another apology for GM’s delay. She also appointed Jeff Boyer to serve as the maker’s new safety czar.
“Jeff will have open access to me and our board. If there are obstacles in his way, he has authority to remove them. If he needs more resources, he will get them,” Barra said.
(Click Here for more on the new GM safety czar.)
While the announcement was well received, it clearly has not solved GM’s problems, and the maker will face a tough day on Capitol Hill from both sides of the political aisle.
“I look forward to this hearing so we can find out from GM and NHTSA how this happened and why these dangerous vehicles were not fixed in a timely fashion,” said Oversight and Investigations Subcommittee Ranking Member Diana DeGette, a Colorado Democrat.