GM execs to face grilling on Hill about why top executives were unaware of defects


Senators want to know what the company’s top lawyer knew, and when, about an ignition switch defect. (Stan Honda/Agence France-Presse via Getty Images)

General Motors executives return to Capitol Hill on Thursday morning for what is sure to be another round of harsh questioning about their handling of an ignition switch defect linked to at least 54 accidents and 13 deaths.

Lawmakers plan to press Mary T. Barra, GM’s chief executive, and general counsel Michael P. Millikin on why top officials remained unaware of the defect for more than a decade even as the company’s attorneys settled legal claims resulting from accidents linked to the problem.

Thursday’s hearing will mark the first time GM’s top lawyer publicly answers questions about the ignition switch debacle.

“There’s a reason Michael Millikin will be testifying in addition to Mary Barra — and that’s because [Sen. Claire McCaskill] will be posing some tough questions that haven’t yet been answered about the role GM’s legal department played in delaying this recall,” said Andrew Newbold, a spokesman for McCaskill (D-Mo.).

An internal investigation by GM found that information about the switch defect never made its way to top executives and instead remained trapped in the company’s engineering and legal departments. Anton R. Valukas, the former U.S. attorney who oversaw the probe, concluded that a pattern of “incompetence and neglect” allowed the problem to fester for more than a decade before executives ordered the first of a series of recalls this year. In the aftermath of the report, Barra dismissed 15 employees, including several GM lawyers involved in safety issues at the company.

Failure of the ignition switch, which was installed in Chevrolet Cobalts and other GM compacts, caused cars to stall, stiffening brakes and steering and disabling air bags. GM has acknowledged knowing about the problem for more than a decade before it began the recalls this year.

The ignition switch defect has touched off a cascading series of problems for GM. The automaker is facing a criminal investigation by the Justice Department, which is reportedly focusing on whether the company misled federal auto-safety regulators and others about what it knew about the switch problem.

GM is facing scores of lawsuits and probes by the Securities and Exchange Commission and authorities in a growing number of states, as well as a growing bill for recalls and financial settlements linked to the defect.

The ignition switch recall led to other recalls, and so far this year, the company has recalled nearly 30 million vehicles — more than three times its annual sales — and set aside $2.5 billion to pay for the safety repairs.

In addition, the company is financing a fund being run by compensation specialist Kenneth R. Feinberg, which is intended to pay compensation for deaths and injuries caused by the defect. The tab for that fund will not be known until all the claims are in and vetted, but it could be well over $1 billion.

Despite it all, GM’s sales continue to grow.

On Wednesday, the automaker reported that it sold 2.5 million vehicles around the world in the second quarter of the year. Sales in the company’s two biggest markets, China and the United States, were up 8 percent and 7 percent, respectively.

“GM did well in the world’s two largest and most profitable vehicle markets and that helped us grow despite very challenging market conditions in parts of South America, Asia and Eastern Europe,” Barra said in a statement.

In addition to Barra and Millikin, scheduled to testify at Thursday’s hearing are Feinberg, Valukas and Rodney O’Neal, chief executive and president of Delphi, which made the defective ignition switch.

Michael A. Fletcher is a national economics correspondent, writing about unemployment, state and municipal debt, the evolving job market and the auto industry.
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