CEO leaves big questions about GM unanswered


Mary Barra’s reception last week before Congress was a lot chillier than during the General Motors CEO’s previous visit to Capitol Hill.

In January, Ms. Barra was a guest of first lady Michelle Obama at the president’s State of the Union address. The president hailed “the daughter of a steelworker” for rising to become the first female CEO of a major automaker.

The steelworker’s daughter didn’t get the same love during her appearances last week before the House energy and commerce subcommittee on oversight and investigations, followed by the Senate subcommittee on consumer protection.

That’s because of recent disquieting revelations that GM for years knowingly installed a defective ignition switch in its Chevrolet Cobalt, Pontiac Solstice and Saturn Ion models that is linked to 31 crashes and 13 fatalities, and have led to a belated recall of 2.6 million cars.

Sen. Claire McCaskill, D-Mo., a former prosecutor, accused the nation’s largest automaker of “a culture of cover-up.” Sen. Kelly Ayotte, R-N.H., a former state attorney general, told Ms. Barra, “I don’t see this as anything but criminal.”

Sen. Richard Blumenthal, D-Conn., also a former state attorney general, took umbrage at GM’s recall notice, which advised Cobalt owners that their vehicles “are safe to drive as long as they remove extra items on their key chains.”

Ms. Barra, who has held GM’s top job only since December, repeatedly told lawmakers that she is boss of the “new GM.”

It is a different company, she suggested, than the old GM, which knew about the deadly defective part in its cars all the way back in 2001, which could have replaced the defective part for no more $5 per recalled car, which chose not to do so for reasons not entirely clear and which kept the information hush-hush until this year.

Ms. Barra was asked if her predecessor as CEO, Dan Akerson, knew that the company had installed a defective part that caused cars to shut down unexpectedly and kept their airbags from deploying. “Not to my knowledge,” she told lawmakers.

She also claimed ignorance that GM secretly changed the part in 2006 to fix the ignition switch problem without also changing the part number (making it appear the part had not changed).

And she told lawmakers that neither she nor other senior executives at GM (that she knew of) were aware until recently that their company settled a civil lawsuit last year in which a lead switch engineer swore in a court deposition that he knew of no changes in the part.

The question we’d like to see answered is whether GM knew about its defective ignition switch — and the financial liability it represented — when the automaker went through bankruptcy in 2009, a process that shielded it from legal liability for prebankruptcy transgressions.

We’d also like to know if GM execs knew about the issue with its defective ignition switch — and covered it up from federal regulators — when it petitioned the Obama administration for a taxpayer bailout.

That the taxpayers lost $10 billion on the $50 billion “investment” the president made in GM was bad enough. If it amounted to a reward for corporate malfeasance that led to the deaths of at least 13 victims, it is an outrage for which those who played a knowing role should face criminal charges.

— From the Orange County Register

 

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