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Disavowing GM decisions of the past, CEO Barra offers apology and further investigation

April 1, 2014 at 6:08 PM EST
Senior lawmakers made clear they want answers for why General Motors took years to fix vehicles with faulty ignition switches, linked to at least 13 deaths. GM CEO Mary Barra acknowledged the company's recalls came too late for some and vowed to get to the bottom of the cause. Gwen Ifill talks to David Shepardson of the Detroit News and Joan Claybrook, former president of Public Citizen.
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GWEN IFILL: General Motors CEO Mary Barra appeared before a congressional committee today for the first time to answer questions about GM’s response to and disclosure of the problems involved in a series of major recalls.

At times, the inquiry turned into a grilling, with one lawmaker even telling her, we don’t trust the company right now.

REP. DIANA DEGETTE, D, Colo.: Between 2003 and 2014, GM learned hundreds of reports of ignition switch problems through customer complaints, warranty claims, lawsuits, press coverage, field reports, and even more internal investigations.

REP. FRED UPTON, R, Mich.: With all that information available, why did it take so long to issue the recall?

GWEN IFILL: Senior lawmakers from both parties made clear they want answers, at issue why GM took so long, years, to fix vehicles with faulty ignition switches. They’re now linked to air bag failures and at least 13 deaths.

GM’s CEO, Mary Barra, has been on the job just since January.

MARY BARRA, CEO, General Motors: Sitting here today, I cannot tell you why it took so long for a safety defect to be announced for this program, but I can tell you we will find out. As soon as I learned about the problem, we acted without hesitation. We told the world we had a problem that needed to be fixed. We did so because, whatever mistakes were made in the past, we will not shirk from our responsibilities now or in the future.

GWEN IFILL: GM company documents indicate the automaker knew of the problem as far back as 2001, in Chevrolet Cobalts, Saturn Ions and other models.

Recalls finally began in February, and the total number of affected vehicles has now reached 2.6 million. Even more recalls are under way for other defects.

But, Barra acknowledged, the action they’re taking now may be far too late for some.

MARY BARRA: Today’s GM will do the right thing. That begins with my sincere apologies to everyone who has been affected by this recall, especially the families and friends who lost their lives or were injured. I am deeply sorry.

GWEN IFILL: Barra vowed that an internal investigation will find the facts, but committee members pressed for details.

REP. DIANA DEGETTE: As far back as 2004, GM conducted problem resolution tracking system inquiry after it learned of an incident where the key moved out of run condition; is that correct?

MARY BARRA: Yes.

REP. DIANA DEGETTE: Thank you.

Now after the PRTS inquiry, one engineer advised against further action because there was — quote — “no acceptable business case to provide a resolution,” at the PRTS was closed. Is that correct?

MARY BARRA: If that is true, that is a very disturbing fact.

REP. DIANA DEGETTE: Yes, it is.

MARY BARRA: That is not the way we make decisions.

GWEN IFILL: Congresswoman Diana DeGette said GM’s own documents showed a defective spring in the ignition assemblies would have cost 57 cents to replace.

The committee also called David Friedman, acting head of the National Highway Traffic Safety Administration. The agency first heard complaints about the GM vehicles in 2005.

DAVID FRIEDMAN, National Highway Traffic Safety Administration: Some of that information did raise concerns about air bag non-deployments. So, in 2007, we convened an expert panel to review the data. Our consumer complaint data on injury crashes with air bag non-deployments showed neither the Cobalt nor the Ion stood out when compared to other vehicles.

GWEN IFILL: Friedman pointed the finger at GM, saying it withheld significant details for years. But his testimony drew fire.

REP. TIM MURPHY, R, Penn.: What specifically did NHTSA ask GM?  And, for example — and this is very important — did NHTSA raise the question with GM, tell us the reasons why an air bag would not deploy in one of your cars? Did you ask GM that question?

DAVID FRIEDMAN: I don’t have a record of that. I know our team did bring up concerns over this case to General Motors in a meeting, but I don’t have records of assessing that specific question.

GWEN IFILL: The questions and answers played out before family members of the 13 victims who earlier in the day appeared on the Capitol steps to demand.

Ken Rimer and his wife, Jayne, lost their daughter Natasha in a 2005 Chevy Cobalt accident.

KEN RIMER, Victim’s Father: The accident report shows that speed wasn’t a factor, weather wasn’t a factor, nor road conditions or traffic. The ignition system was found in the accessory position by accident investigators. None of this ever had to happen. It could have been easily addressed and corrected.

GWEN IFILL: Laura Christian’s 16-year-old daughter, Amber Marie Rose, also died in a 2005 crash.

LAURA CHRISTIAN, Victim’s Mother: Our daughters, sons, sisters, brothers, mothers, fathers, wives, and husbands are gone because they were a cost of doing business GM-style. Corporate executives made a decision that fighting the problem was cheaper and easier than fixing the problem.

GWEN IFILL: GM’s Barra met with the families yesterday, and after the hearing, she promised again the automaker will meet its obligations.

MARY BARRA: We are definitely moving to a culture that is focused on the consumer, that is focused on the customer, is focused on high quality and safety. And that’s my direction, and that’s what we’re doing today.

GWEN IFILL: Barra didn’t say when GM’s internal probe will conclude. The Justice Department has launched its own investigation.

Both Mary Barra and David Friedman will testify before a Senate committee tomorrow.

For more on what came out of today’s hearing, we turn again to David Shepardson, who covers the automotive industry for The Detroit News, and Joan Claybrook, the president emeritus of Public Citizen, who’s been working with some of the victims’ families. She’s also a former administrator of the National Highway Traffic Safety Administration.

David Shepardson, we heard Mary Barra say not once, but several times today, that today’s GM wouldn’t do — would do the right thing. What did yesterday’s GM do? What was the culture she was talking about which led to this?

DAVID SHEPARDSON, The Detroit News: Well, she found herself in the position of basically disavowing and rejecting many of the decisions that GM made, you know, around 2005.

She was presented with e-mails that showed the company had opted not to improve the ignition switches, in one case saying that the amount the company would save in warranty costs, only about 10 to 15 cents per switch, wasn’t as much as the 90 cents per switch it would have cost to make the change.

She said the new GM doesn’t put a cost on safety, whatever it takes, they’re going to fix cars. But, you know, in the face of these documents, she had really little choice but to say, this is not acceptable today.

GWEN IFILL: And she said repeatedly that she couldn’t answer the question because it’s still under investigation, right?

DAVID SHEPARDSON: And that only went so far with the committee, and the Senate tomorrow is going to push her, too.

And part of that is a fair answer that they — there are a lot of questions they don’t know. I mean, GM has amassed about six million pages of records in this investigation. But a part of it is still getting to the bottom of, how far up the chain did these decisions get made? Was this a low-level decision by engineers to not fix this, you know, for what was a very small amount of money, or did it go much higher than that?

GWEN IFILL: Explain one key thing which came up today, which is this potential cover-up, at least that’s the words some of the members of Congress used, of a safety problem that was found in 2006?

DAVID SHEPARDSON: Well, in 2006, the switches that have been recalled or linked to the 13 deaths, the switch was changed to a much-improved switch, but the company didn’t change the part, in fact, showed in the committee the record from the engineer that signed off on it.

They didn’t change the part number. That’s very unusual, because you would want to change the part, be able to track how the new switch is performing vs. the old switch. And it wasn’t actually until last year that an outside engineer figured out this problem, because they couldn’t understand why some vehicles were showing much higher failure rates than others.

And that is a central question here. Why didn’t GM change the part number? Why didn’t they inform NHTSA, and was this something that they were eager to hide by not making a change in the part number?

GWEN IFILL: Joan Claybrook, as a former head of NHTSA and watching these hearings today, speaking on behalf of the families, the victims’ families, were you satisfied with the answers you heard?

JOAN CLAYBROOK, Former President, Public Citizen: No. I think that Mary Barra should have been more prepared to give particular answers.

General Motors has submitted 200,000 pages of documents to the committees in Congress. And they have also submitted a timeline, several different versions, I think three or four of them, to the Department of Transportation.

So she should have been better prepared, in my view, to give answers. I think that she wants to reserve her options for how she frames this when she gets the whole investigation finished inside General Motors.

GWEN IFILL: GM announced today that they have retained Ken Feinberg, the noted compensation specialist, to speak about how to compensate certain victims of this, pre-bankruptcy, pre-2009.

So is that what you think? Is that how an internal investigation should look, looking in terms of compensation?

JOAN CLAYBROOK: Well, that’s not the internal investigation I was referring to. I’m referring to the hiring of Jenner & Block, an outside law firm, to do an unvarnished evaluation, as Mary Barra said, of what happened and why it happened and who was involved.

I think it’s a very positive move to hear that they have hired Ken Feinberg, because consumer groups asked Mary Barra in a letter to set aside a $1 billion fund to compensate those people who were injured or killed in crashes that occurred before July 2009, which is the date of the bailout.

And what happened in the bailout — it was quite unusual, in my view — is that they said that any crash that occurred before the bailout is the responsibility of the old General Motors, which has no money, and, therefore, people are not going to get any money, any compensation for their injuries.

GWEN IFILL: So there’s a liability shield pre-2009 for the company?

JOAN CLAYBROOK: That’s right. There’s a liability shield. That’s right.

And so the fact that she’s now talking about having Ken Feinberg look at this and see if there’s a way to compensate these individuals, I think that that’s a very positive move, and I hope that — that that occurs.

GWEN IFILL: David Shepardson, I want to ask you about the National Highway Traffic Safety Administration as well, their role. They were also testifying today. They were also pressed on these questions.

Did members, did lawmakers seem to believe that they were any way culpable on these?

DAVID SHEPARDSON: They’re really bearing down on a decision that NHTSA made in 2007.

One of their senior investigators said there were reports of four fatal crashes in these now recalled Cobalts, and asked his superiors to form — to open a formal investigation. The government didn’t do that. And, unfortunately, in terms of timing, one of these special crash reports came out early the next year which showed that, in fact, the non-deployment of the air bag was tied to the fact the key had slipped out of position, but by the time they got that report, the government had already decided not to open that investigation.

Now, the government says the data wasn’t there and really tried to point the finger back at GM, saying, if they’d had more information, like the part change number, like the fact that, in 2002, the initial part, the switch never met GM’s own specifications, and they told their supplier go ahead and build it anyway, if — so they argue, the government, that if GM had provided more information, they could have made a different decision. They’re not admitting any wrongdoing at this point.

GWEN IFILL: Joan Claybrook, should the governor — government have had more responsibility for this?

JOAN CLAYBROOK: Absolutely.

I think that General Motors bears the basic responsibility, because it built and designed and sold and evaluated and had a lot of information about this error in the ignition switch. But the government keeps saying they didn’t have enough data, which is really terrifically outrageous.

The fact is, it’s a design defect. This problem is a design defect. And if you have a design defect, it affects every part that was made. And they knew that there were crashes that were caused by this, that there were injuries that resulted in death. It didn’t matter how many consumer complaints they had. It didn’t matter how many warranty claims they had.

They didn’t need any more data. And when I was in charge of this agency in the ’70s, we looked at things to see whether or not there was a design defect. And if there was, and if it could cause harm, and if the problem arose, that was absolutely, per se, a design — a safety defect.

And so they’re treating this whole thing as though they have to gather tons and tons of paper in order to make a decision, and I think that that’s completely wrong, and it’s a real failure at the agency. And I hope that they will revise this. And there’s a lot of work going on now to try and persuade them to look at this in a different way.

GWEN IFILL: All right.

For the record, we did invite representatives from GM to appear tonight, and they declined.

Joan Claybrook, president emeritus of Public Citizen, and David Shepardson of The Detroit News, thank you both.

DAVID SHEPARDSON: Thanks, Gwen.

JOAN CLAYBROOK: Thank you.