General Motors chief executive Mary T. Barra returns to Capitol Hill on Wednesday, where a House subcommittee is expected to grill her about the troubling findings of an internal report into why the automaker took more than a decade to address a deadly ignition-switch defect.
The investigation, led by former U.S. attorney Anton R. Valukas, found a company hobbled by an internal culture that discouraged the flow of bad news, failed to communicate across departments and often held elaborate meetings that resulted in earnest salutes but no action. Some of these are the very problems that were seen as contributing to the automaker’s 2009 bankruptcy — and a $50 billion government bailout.
Lawmakers are expected to question Barra and Valukas on how these failings resulted in the automaker treating the ignition-switch problem with no sense of urgency, even as accidents and injuries mounted. The defect has been linked to at least 54 accidents and 13 deaths. For years, the problem was misdiagnosed and treated as a “customer convenience issue,” rather than a critical safety problem.
“Because GM personnel failed to understand the potential hazard caused by the ignition switch, GM engineers debated through various committees whether any of the potential fixes were cost effective,” Valukas said in testimony prepared for the committee, where he will appear with Barra. “This focus on cost was driven by the failure to understand that a safety defect was at issue.”
In February, the automaker began recalling 2.6 million Chevrolet Cobalts and other small models equipped with the defective switch.
That recall has been followed by dozens of others, and so far GM has recalled 20 million cars in North America. On Monday, the automaker recalled 3.16 million cars in the United States to fix an ignition problem similar to the one in the Cobalts and in other small cars — prompting concern among members of Congress.
“This latest recall raises even more questions about just how pervasive safety problems are at GM,” Rep. Fred Upton (R-Mich.), chairman of the Energy and Commerce Committee, said in a statement Monday. “This is not just a Cobalt problem. Drivers and their families need to be assured that their cars are safe to drive. Has the company identified all potential problems? And has GM taken all necessary actions to fix the issues?”
In the wake of the report by Valukas, GM has dismissed 15 employees and disciplined five others. The company also has hired compensation specialist Kenneth R. Feinberg to establish a fund for victims and their families. In prepared testimony, Barra said Feinberg has “full authority to establish eligibility criteria for victims and determine compensation levels.” Feinberg is expected to present his plan to GM executives by the end of the month and the fund aims to begin processing claims Aug. 1.
“This isn’t just another business challenge,” Barra said in her prepared testimony. “This is a tragic problem that never should have happened. And it must never happen again.”
Barra expressed that resolve when she appeared before the panel in April. Back then, she deflected many of the panel’s questions, saying she was awaiting the results of the Valukas report.
Now that the report is in, she will be back on the hot seat. Among the questions on the minds of committee members are:
●How could an issue that caused cars to stall while on the road not be seen as a safety problem?
●Does the Valukas report mark the end of GM’s probe into the problem?
●Does GM think the failures revealed in the Valukas report affected other GM cars?
●How could the company’s cultural problems still be festering five years after the 2009 taxpayer bailout?
●How did these problems develop, and what will cure them?
“We look to get answers directly from GM CEO Mary Barra and internal investigator Anton Valukas on Wednesday when they appear before the committee,” Upton said in a statement.