• Apr 2, 2014

GM CEO Mary Barra worked to distance herself from a problem that originated more than a decade ago.

Despite much rhetoric about a reformed corporate culture at General Motors, several US senators said Wednesday the company's new leaders are behaving a lot like the old ones.

In a hearing filled with barbed exchanges Wednesday, the ranking member of the Senate Commerce Committee accused GM of engaging in a "culture of cover up," for its role in hiding a deadly defect for more than a decade. Sen. Claire McCaskill (D-Mo.) said the company had purposely hindered disclosure of an ignition-switch defect that has killed at least 13 motorists.

Even as General Motors CEO Mary Barra worked to distance herself from a problem that originated more than a decade ago by differentiating between an old corporate culture and a newer, more safety-oriented one, other members of the Senate Commerce Committee said the company's leadership has continued to stymie the safety interests of millions of motorists and conceal problems in recent months.

"Even under the 'new' GM, it took the company nine months to take action after this egregious violation of public trust," McCaskill said, noting companies are supposed to recall defective vehicles within five days of learning of safety defects.

In one of the most contentious portions of the hearing, McCaskill charged that a senior General Motors engineer perjured himself during testimony last year in a lawsuit related to the ignition-switch flaw. The engineer, Ray DeGeorgio, claimed under oath that he had no knowledge of a change in ignition-switch parts when documents later revealed he signed a form ordering a parts change.

A separate investigation conducted by the Department of Justice will likely examine the company's criminal culpability.

Later, McCaskill said GM had worked to conceal the documents from that lawsuit and keep it hidden from others involved in litigation over deaths and injuries related to the defect. "This is what corporations in America do," she said. "They hide documents."

Sen. Richard Blumenthal (D-Conn.) told Barra that he believed the affected vehicles are dangerous to drive until they are fixed, despite company assurances to the countrary, and that he believed GM's actions warranted charges of criminal wrongdoing.

"The more I hear and see in these documents and the more I learn about what happened ... the more convinced I am that GM has a real exposure to criminal liability," he said. "I think it's legal and appropriate that GM will face prosecution."

A separate investigation conducted by the Department of Justice will likely examine the company's criminal culpability. A DOJ investigation into an auto safety crisis is unusual, but just a short while ago, the department completed a four-year investigation of Toyota that resulted in a $1.2 billion settlement for the company.

Wednesday marked the second consecutive day of testimony for Barra, who had earlier appeared before the House Subcommittee on Investigations and Oversight. Like she did the day before, she deferred answering many questions, saying she wanted to wait until an internal review being conducted by former U.S. Attorney Anton Valukas is complete.

Senators from both political parties were frustrated by Barra's inability and unwillingness to offer direct answers to their questions. Despite her assertions the company had changed its culture to one that favored safety, they were angered by her inability to commit to creating a victims compensation fund, her refusal to support new legislation that would provide more safety transparency for consumers, and her refusal to hold anyone within the company accountable thus far.

Regarding DeGeorgio, McCaskill said, "For the life of me, I can't understand why he still has his job. He perjured himself under oath."

Sen. Marco Rubio (R-Fla.) said, "If I owned a restaurant, and poison was one of the ingredients, and I wouldn't change the recipe because it's not cost effective, I would go to jail."

Sen. Barbara Boxer (D-Calif.) perhaps had the sharpest personal words for Barra, saying that she was disappointed that a 33-year employee of General Motors who held several high-ranking positions had such little knowledge of the problem, which documents show was first detected in 2001, four years before the affected cars even went on sale.

"You're a really important person to this company," Boxer said. "It's strange that such a top employee would know nothing."

Over the past two months, more than 2.6 million cars have been recalled worldwide due to the defect, which can turn off the engines and airbag systems while the cars are in motion. At least 13 deaths have been blamed on the problem, according to GM, as well as 31 car accidents. Replacement parts for affected vehicles should begin arriving at dealerships next week, and GM says there should be enough parts for all affected cars by October.

Rattling off memories of automotive safety crisis as far back as the Ford Pinto, Sen. Ed Markey (D-Mass.), Blumenthal and Boxer asked Barra to support two pieces of legislation that would enhance motorist safety and make more information available to consumers.

The first is legislation Markey and Blumenthal introduced last week, which would widen the scope of data available to the National Highway Traffic Safety Administration and make it more transparent to the public. The second is legislation Boxer sponsored last year that would prevent rental car companies from loaning cars with outstanding recalls that haven't yet been repaired.

In the second case, Barra said she wanted time to read the full legislation, Boxer snapped that she should have read it already since it had been pending for a year. In the former case, Markey accused Barra of continuing a long industry tradition of fighting safety legislation.

Five times, Markey asked Barra if she would support various portions of his legislation. Barry would not commit her support, only saying that GM's legal team would review the legislation and give its input.

"I am very troubled that you are not willing to commit to ending this culture of secrecy at General Motors," Markey said.

"I didn't say that," Barra replied.

"Yes, you have," Markey said. "And I know this, because I have tried year after year – for more than 10 years – to have legislation passed that would require the disclosure of all this information, and it was the automobile industry that killed my legislation year after year. This is the moment now, for you to say more than, 'I'm sorry.'"

Pete Bigelow is an associate editor at AOL Autos. He can be reached via email at peter.bigelow@teamaol.com and followed on Twitter @PeterCBigelow.


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  • 98 Comments
      Rick
      • 8 Months Ago
      GM built poor quality cars in the 80's and 90's. They did not stand behind their product. They went bankrupt. Now their bailed out and still building crappy product and refusing to acknowledge mistakes. Any surprises here?
      rsxvue
      • 8 Months Ago
      Mary Barra, I understand this is a fairly new position for you but in this case, ignorance is not bliss.
      oknahs
      • 8 Months Ago
      Come on SGT. Shultz (Barra) you must have known something since you have been in the engineering dept. Barra says, I know nothing, nothing.
      Jean-Fran├žois Houde
      Oh wait these cars have five star crash rating and standard air bags in all the good spots?!? Right... unless they don't really work... Guess this wasn't important to marketing either? Thank you, for instilling confidence... Let's go back to a Volvo now shall we?
      scott3
      • 8 Months Ago
      The people accusing of the cover up are the same people who will not come clean on Benghazi and the IRS targeting. This is a bad enough deal that we do not need a bunch of no nothing grand standing politicians parading around. They should be spending their time balancing the budget and fixing the health care that just spiked my premiums. Mary did a fine job and we have to remember that GM can not come out and say all they could say at this point with pending legal cases. Legal console has limited speaking till they can negotiate deals with the families that need dealt with and the many false claims that the ambulance chasers filed because they smelled blood in the water. In the end it will end up like this. All the cars that are brought in will be fixed. The families will be settled with. GM will be fined by the government and GM will release a report on how they were so screwed up that the suppliers were pressured to make a cheap parts and the reports how it was reported but in the mix of so many middle managers never reported it through the whole chain. In Lutz book on GM he reports how they could not communicate how to improve the cars for their own benefit by closing body gaps so how do you expect the guy who cheeped out on the part to report it to the managers above him. This is not just an issue at GM but many large MFGs. I do not excuse GM here but I also know this is not the worst case of this we have seen in the auto industry nor the last. The media will tire of this and it will drop once the cars are repaired. I really think someone took a chance on a cheap part and then took the chance it would go un noticed as generally cars stall all the time and seldom result in deaths. In fact there are issues out there now that have cars like the 350z with a higher ratio of deaths per million cars than the Cobalt. Hell there are three cars ahead of it from this era alone. This is one of those deals you have to keep perspective. And even if you hate GM this could easily come to your favorite brand in 6 months. Audi, Toyota, Ford, Chrysler and most others have faced similar issues more than once. The media loved to report the hold on the Cruze and made it headline news but never reported the follow up much at all on why and what was the real issue. Fair I think not but that is the media.
        Johan
        • 8 Months Ago
        @scott3
        When will tea baggers die off? There is no Benghazi conspiracy, and the IRS was targeting Liberal groups as well. I would never buy a GM car anyway, and this story just re-affirms that. Go back to CNN with your nonsense please.
          scott3
          • 8 Months Ago
          @Johan
          So no one died? We know who saved the others but who is responsible for the 4 dead? FYI I am not a Tea Bagger I just want a responsible government. I know it is a pipe dream but at least we can try.
          Jobu
          • 8 Months Ago
          @Johan
          Johan. I am philosophically allied with certain members of the Tea Party. If you keep calling people like me teabaggers, I just might have to tea bag your drum set.
          scott3
          • 8 Months Ago
          @Johan
          I agree this is not the first time for the IRS but it should be the last time. Next time you may be targeted. Ok how about the Nissan Frontier it was number two on the list I saw. How about all the people burned in the Crown Vic? There have been cases after cases. At this point only 13 confirmed deaths here out of what over 2.6 million cars recalled now? Now like I said it is not to excuse GM but we much keep the perspective here. But haters will hate no matter what. Even the number of complaints the TSB had did not set off any alarms. Most MFG do not go to them and say recall use. It is the job of the TSB to investigate these things. Right now they are trying to just focus it on GM and skirt the issue. I do agree we need the whole picture and to be honest in this cased odds are you never will get it. GM was so dysfunctional even if they wanted too they may never get to the bottom. Also the records of the accidents are not all ways clear as to if it was really an ignition issue or it was just another driver error accident. This needs to be looked at and dealt with but for real out rage where are all the people upset about the thousands killed by drunk and inattentive drivers. More die this way than any other and it largely goes un notices buy many making a big deal of this. Many of them now want drugs legal that will only compound the issue. There is a sense of corruption in all of this. GM, The Government, the many lawyers that really do not have a case looking for a chunk, the media who love the if it bleeds it leads mentality and finally those who hate GM that fail to understand this can and will happen to their favorite brand at some point if it already has not. Like it or not if you like cars you have skin in this game and it will cost you one way or the other because other will not do what is right anymore.
      bookemd
      • 8 Months Ago
      Here's the deal. I think Mary handled herself very very well at the hearing. I honestly believe this issue came to her attention very recently and had no fricken idea things were being covered up when she was way down the todem pole ten years ago in the company. She will lead in the right direction. The Goverment has never covered things up right? Haha.
        cms
        • 8 Months Ago
        @bookemd
        Spin and divert attention away... Nice tu. She may be new as CEO, but she is well versed in the GM ways. Decades of experience in fact. Saying "Bububu she didn't know, lets cut GM a break" is both offensive and disingenous.
        waetherman
        • 8 Months Ago
        @bookemd
        You mean like 7 years ago when she was the VP for Global Product Engineering she had no idea that, um, some products that were engineered were fatally defective? Gimme a break. Whether or not she knew is not the issue though. She's the CEO and she has to answer for all crimes present and past. If she's personally implicated that's even worse, but the main point is that GM is criminally responsible for multiple homicides.
      TPGIII
      • 8 Months Ago
      So if I heard this correctly, GM knew of the defect before they started building cars, but didn't fix it because it would have cost 90 cents more per car to make them correctly, but would have only cost 15 cents for repairs under warranty. So they never considered the costs of a recall or lawsuits or lost customers. But, what really surprises me is the 15 cents per car for warranty work. It must cost at least $100 to have a service manager look at it, technician replace it, part guy to stock it, clerk to write it all up. That tells me that they didn't expect very many people to complain about the defect. Much less than 1%. I had no idea that their customers had such a high tolerance for crap.
      bluemoonric
      • 8 Months Ago
      Senators condemn General Motors' ongoing culture of coverups' - Pot meet kettle.
      ken
      • 8 Months Ago
      Politicians criticize GM to have "a culture of coverups" Lol. POLITICIANS?
      aatbloke1967
      • 8 Months Ago
      Ironic that American politicians don't condemn their own ridiculously lackadaisical gun laws which kill some 12,000 people every year. But that would require a degree of effort.
        Car Guy
        • 8 Months Ago
        @aatbloke1967
        If you factor out suicides and gang idiots killing each other, the real number is under 2,000. BTW, that means you are more than 15x as likely to be killed in a car crash. But I never hear people like you calling to ban high capacity cars and SUV's.............
          aatbloke1967
          • 8 Months Ago
          @Car Guy
          Spin the numbers as nefariously as you so desire. Twelve thousand deaths a year is ridiculous. It doesn't happen in civilised countries, but civilised countries don't obsess over arming themselves to the teeth either. Still, I say give Americans more guns so the rest of the world can feel relief that such an idiotic country can systematically eradicate itself with even greater fervour.
      • 8 Months Ago
      [blocked]
        Doug
        • 8 Months Ago
        Good, then we don't have to hear you whine about it.
      Chris
      • 8 Months Ago
      General Motors "culture" is exactly why they went into bankruptcy .Why they have these cover ups and why it will happen AGAIN. How that the US taxpayer is out billions of dollars with no accountability from GM is an obvious indicator.Compare the free money giveaway to GM with the loan given to Chrysler during the Reagan administration, for example, and the unanimous sense of national indignation at Chryslers mismanagement which compelled THEM to payback the US taxpayer IN FULL. How times have changed! Now We have another know nothing GM CEO reinforcing this corporate culture of no accountability. These are not good indicators. In My opinion GM should have been forced into bankruptcy/restructuring and come out a leaner and more dynamic company It seems to be in large part due to politics.In which GM/UAW delivers votes to a certain political party which is in large part to blame and that party's embracing of our culture of mediocrity
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