In her testimony before a U.S. Congressional subcommittee regarding the recall of more than 1.4 million General Motors (GM) automobiles for a faulty ignition switch, CEO Mary Barra said she first learned of the problem with the ignition switch in December, from product chief Mark Reuss. Ms. Barra took the reins as CEO of the company on Jan. 15, 2014. When asked if her predecessor CEO Dan Akerson was aware of the issue, she answered “not to my knowledge,” and says “I cannot tell you why it took so long” to announce the defect and recall the vehicles. She told the subcommittee there is an internal investigation underway to answer these questions.
The ignition switch problem allows the key to unintentionally slip from the “run” to “off” or “accessory” position while the vehicle is being operated. The ignition defect can cause the sudden loss of engine power, braking and steering, creating a hazardous emergency situation. GM recalled about 780,000 2005-07 Chevrolet Cobalt and Pontiac G5 vehicles on Feb. 13. Twelve days later, it expanded the recall to include an additional 590,000 model-year 2003-07 Saturn Ion, Chevy HHR, Pontiac Solstice, and Saturn Sky vehicles.
Beasley Allen Founding Shareholder Jere L. Beasley, who last week filed a wrongful death lawsuit on behalf of the family of a woman who was killed in a 2005 Chevrolet Cobalt, responded to the testimony. “While Ms. Barra is admitting fault, she is using an internal investigation to keep from answering some key and basic safety questions,” he said. “GM placed a defective vehicle on the market that created serious safety hazards resulting in the loss of many lives. Ms. Barra claims not to know about much of the damaging information relating to known safety problems that GM submitted to Congress prior to her testimony. With all due respect, it’s simply unbelievable for the CEO not to know what the automaker supplied on the history of the defect.
“We call on GM to establish a multi-billion-dollar fund to compensate victims whose claims may be affected by the GM bankruptcy and to put an independent panel in place to administer the fund. After the experience with Kenneth Feinberg in the BP litigation, I am hopeful this man won’t be involved. GM is guilty of a massive cover up of a known defect that may well have killed over 300 innocent victims. Hopefully this company will not hide behind a previous bankruptcy in 2009 in an effort to do further damage and hurt to the families of GM’s victims. The court system will be able to handle claims that occurred post-bankruptcy, but the claims of pre-bankruptcy victims must be dealt with as well.”
Court documents and other evidence reveal that GM knew about the ignition switch problem as early as 2001. GM has linked 31 crashes and 12 deaths to the faulty ignition switch, but a new study commissioned by the Center for Auto Safety indicates the death toll could be as high as 303.
The congressional investigation is being conducted under the direction of the U.S. House Energy and Commerce Committee’s Oversight and Investigations subcommittee. The hearings will include testimony from National Highway Traffic Safety Administration acting administrator David Friedman. Prior to becoming CEO, Ms. Barra was Executive Vice President, Global Product Development, Purchasing & Supply Chain since August 2013, and as Senior Vice President, Global Product Development since February 2011. In these roles, she was responsible for the design, engineering, program management and quality of GM vehicles around the world.