GM CEO Mary Barra will testify the automaker's failures in handling the ignition switch recall before a U.S. House subcommittee again today.
General Motors CEO Mary Barra got a rough reception during her first appearance at a congressional hearing, and after nearly 18 million recalled vehicles and a scathing report about the automaker’s shortcomings round two isn’t likely to be any better.
Barra and Anton Valukas, the former U.S. Attorney hired to investigate why the company failed to act sooner to fix the ignition switch problem on 2.6 million vehicles, will testify today about his report and what Barra plans to do to make sure this kind of problem doesn’t resurface in the future.
“I want this terrible experience permanently etched in our collective memories,” she plans to tell the committee in her opening remarks. “This isn’t just another business challenge. This is a tragic problem that never should have happened. And it must never happen again.”
Barra’s last appearance, which was mocked in a skit on Saturday Night Live, saw her battered by the members of the committee who were not satisfied with her responses to their questions. She failed to answer much of what was asked, saying she wanted to see the result of the Valukas investigation.
Others on the committee also appeared annoyed that she wouldn’t commit to setting up a fund to compensate victims. Barra noted during her testimony that the company hired Kenneth Feinberg, who oversaw compensation funds for other high-profile issues, and they were awaiting his recommendations.
For many on the committee, getting detailed information on the fund will be a priority during today’s hearing, and it’s likely they’ll be disappointed. While GM has said it will put together a fund, Feinberg hasn’t yet decided how much should be in it. Barra did say the automaker plans begin paying out claims in August. More than 300 claims have been filed, although lawyers for some of the 31 injured and 13 deaths related to the problem are skeptical of how the process will work.
(“Deathtrap” and other charged words make GM’s list of banned words. For more, Click Here.)
Committee members are also likely to push Barra for specifics on how the company plans to avoid this kind of problem again. While she’ll point out the company fired 15 employees and disciplined five others, restructured its safety-related reporting procedures, appointed a safety czar and instituted a company-wide safety review, which has resulted in 40 recalls accounting for nearly 18 million vehicles.
(Click Here for details on GM’s latest round of six recalls.)
Finally, it is expected that members are going to skeptically ask how Barra, who at one point during the process was head of product development, and other senior executives could be unaware of the problem. Barra maintains she wasn’t made aware of the problem until January, at which point she ordered the recall.
(To see if GM will make its goal for ignition switch repairs, Click Here.)
Valukas will get plenty of time in the spotlight today, in particular because some look upon his report with a raised eyebrow because his firm, Chicago-based Jenner & Block, has business ties with GM. He notes in his report there are some unanswered questions, including whether there was civil and criminal culpability?
That aside, he’s expected to comment further on his observations about the maker, including could this happen again? It would appear he’s not confident that it couldn’t happen again. His investigative team found an “alarming” lack of urgency about fixing the problem during their interviews with more than 225 GM employees.