General Motors failed to designate a flawed ignition switch linked to multiple deaths as a safety concern, chief executive Mary Barra told jurors at a Texas trial.
GM engineers in 2004 and 2005 “misdiagnosed it as a customer satisfaction issue and not a safety issue,” Barra said in a video deposition taken last year and played at trial Monday by attorneys for the plaintiff.
“A series of mistakes were made over a period of time that caused the ignition-switch defect,’’ Barra testified. “This had tragic consequences.’’
Barra’s testimony, from a previously unseen deposition taken for multiple lawsuits, is the CEO’s first to jurors weighing the company’s liability to accident victims allegedly harmed by faulty ignition switches GM knowingly put in cars for years.
GM recalled 2.6 million vehicles with the flawed switches, which, if jostled, can unexpectedly shift into the off position, stalling engines. The defect has been linked to at least 124 deaths and 275 injuries.
The video was shown in a case brought by a Houston family that claims a defective switch caused a fatal car crash in 2011, which resulted in Zachary Stevens, then 19, being charged with manslaughter. That charge was dismissed because the accident involved a recalled car. Stevens is seeking compensation for brain injuries and the cost of defending his criminal case.
When pressed on whether GM intentionally hid a deadly flaw from regulators and customers, Barra said the defect “could cause frontal air bag non-deployment, and certainly if the air bag doesn’t work, it could cause a problem that could cause a fatality.”
— Bloomberg News
Home Depot, the world’s largest home-improvement retailer, posted second-quarter profit that rose 9.3 percent and boosted its earnings forecast for the year as Americans continued spending on their houses.
Net income rose to $1.97 a share in the quarter, which ended July 31, the company said Tuesday in a statement. That matched analysts’ average estimate.
The results showed that consumers are still willing to splurge to fix up their homes, spurred by rising home values.
“We are fortunate in that we are in a space where the customer is willing to spend,” Home Depot chief executive Craig Menear said in a conference call with analysts. “That’s clearly being driven by the dynamics that exist in the housing market.”
Home Depot said profit this year will be $6.31 a share, up from its previous forecast of $6.27. The company reaffirmed its projection that sales will rise about 6.3 percent.
Home Depot’s second-quarter sales rose 6.6 percent, to $26.5 billion, in line with analysts’ projections. Sales at Home Depot stores open for more than a year increased 4.7 percent, down from 6.5 percent in the previous quarter.
— Bloomberg News
● U.S. consumer prices were unchanged in July as a big drop in gasoline and other energy prices kept inflation under control. The Labor Department says the flat reading for overall inflation followed a 0.2 percent gain in June. Energy prices fell by the largest amount in five months. Core inflation, which excludes the volatile energy and food categories, edged up 0.1 percent in July.
● Apartment construction in the Northeast fueled a jump in building in July. The Commerce Department said housing starts rose 2.1 percent, to a seasonally adjusted annual rate of 1.21 million, the highest level since February. Most of the gains came from an 8.3 percent acceleration in the construction of multi-family buildings. Construction of single-family houses edged up 0.3 percent. Home construction climbed 15.3 percent in the Northeast. The Midwest and South reported smaller gains, while starts slipped in the West.
● U.S. factories cranked out more autos, machinery and chemicals in July, lifting production by the most in a year. The Federal Reserve said factory output grew 0.5 percent in July, after a 0.3 percent gain in June. Overall industrial production, which includes utilities and mining, expanded 0.7 percent, the biggest increase since November 2014. Utilities’ output jumped 2.1 percent as hotter weather boosted air conditioning use. Mining activity rose 0.7 percent, its third straight gain.
● Mississippi Secretary of State Delbert Hosemann says Morgan Stanley will pay up to $4.2 million to partially reimburse customers who suffered “inordinate losses” because a portfolio manager allegedly used high-risk investments for people who hadn’t agreed to them. Hosemann says the investment firm agreed to resolve a probe by the securities division of his office. In a consent order released Tuesday, the firm neither admitted nor denied the allegations about Steven Wyatt, who worked as portfolio manager in its Ridgeland, Miss., office, starting in 2007. Hosemann says 259 accounts from 15 states were affected.
● Kentucky’s attorney general announced Tuesday that he is seeking thousands of dollars in damages for each patient in the state who got a vaginal mesh implant made by Johnson & Johnson and its medical device unit, accusing the companies of conducting a deceptive marketing campaign. Attorney General Andy Beshear accuses the company of concealing and misrepresenting to doctors and patients many of the associated risks. The plastic mesh is used to treat pelvic organ prolapse, a condition involving the shifting of organs that can occur after childbirth, a hysterectomy or menopause. The implants have prompted tens of thousands of lawsuits across the nation.
— From news services
● 2 p.m.: Federal Reserve releases minutes from its July interest-rate meeting.
● Earnings: Lowe’s, Target.
— From news services