[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
THE GM IGNITION SWITCH RECALL: INVESTIGATION UPDATE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
JUNE 18, 2014
__________
Serial No. 113-154
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
__________
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
RALPH M. HALL, Texas HENRY A. WAXMAN, California
JOE BARTON, Texas Ranking Member
Chairman Emeritus JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois FRANK PALLONE, Jr., New Jersey
JOSEPH R. PITTS, Pennsylvania BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon ANNA G. ESHOO, California
LEE TERRY, Nebraska ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan GENE GREEN, Texas
TIM MURPHY, Pennsylvania DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee MICHAEL F. DOYLE, Pennsylvania
Vice Chairman JANICE D. SCHAKOWSKY, Illinois
PHIL GINGREY, Georgia JIM MATHESON, Utah
STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington DORIS O. MATSUI, California
GREGG HARPER, Mississippi DONNA M. CHRISTENSEN, Virgin
LEONARD LANCE, New Jersey Islands
BILL CASSIDY, Louisiana KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky JOHN P. SARBANES, Maryland
PETE OLSON, Texas JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia BRUCE L. BRALEY, Iowa
CORY GARDNER, Colorado PETER WELCH, Vermont
MIKE POMPEO, Kansas BEN RAY LUJAN, New Mexico
ADAM KINZINGER, Illinois PAUL TONKO, New York
H. MORGAN GRIFFITH, Virginia JOHN A. YARMUTH, Kentucky
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
Subcommittee on Oversight and Investigations
TIM MURPHY, Pennsylvania
Chairman
MICHAEL C. BURGESS, Texas DIANA DeGETTE, Colorado
Vice Chairman Ranking Member
MARSHA BLACKBURN, Tennessee BRUCE L. BRALEY, Iowa
PHIL GINGREY, Georgia BEN RAY LUJAN, New Mexico
STEVE SCALISE, Louisiana JANICE D. SCHAKOWSKY, Illinois
GREGG HARPER, Mississippi G.K. BUTTERFIELD, North Carolina
PETE OLSON, Texas KATHY CASTOR, Florida
CORY GARDNER, Colorado PETER WELCH, Vermont
H. MORGAN GRIFFITH, Virginia PAUL TONKO, New York
BILL JOHNSON, Ohio JOHN A. YARMUTH, Kentucky
BILLY LONG, Missouri GENE GREEN, Texas
RENEE L. ELLMERS, North Carolina HENRY A. WAXMAN, California (ex
JOE BARTON, Texas officio)
FRED UPTON, Michigan (ex officio)
C O N T E N T S
----------
Page
Hon. Tim Murphy, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 1
Prepared statement........................................... 3
Hon. Diana DeGette, a Representative in Congress from the state
of Colorado, opening statement................................. 5
Hon. Fred Upton, a Representative in Congress from the state of
Michigan, opening statement.................................... 6
Prepared statement........................................... 7
Hon. Janice D. Schakowsky, a Representative in Congress from the
State of Illinois, opening statement........................... 9
Witnesses
Mary T. Barra, Chief Executive Officer, the General Motors
Company........................................................ 11
Prepared statement........................................... 14
Answers to submitted questions............................... 109
Anton R. Valukas, Jenner and Block............................... 17
Prepared statement........................................... 18
Answers to submitted questions............................... 121
Submitted Material
Document binder \1\.............................................. 68
Committee memorandum............................................. 70
Letter of June 17, 2014, from the Center for Auto Safety to Mr.
Valukas, submitted by Ms. DeGette.............................. 79
Report from June 2014 entitled, ``Driven to Safety,'' from the
American Association for Justice, submitted by Ms. DeGette..... 82
----------
\1\ The document binder can be found at: http://docs.house.gov/
Committee/Search/Home.aspx?Keyword=Path%3a%22%2fIF02%2f%22.
THE GM IGNITION SWITCH RECALL: INVESTIGATION UPDATE
----------
WEDNESDAY, JUNE 18, 2014
House of Representatives,
Subcommittee on Oversight and Investigations,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:02 a.m., in
room 2123 of the Rayburn House Office Building, Hon. Tim Murphy
(chairman of the subcommittee) presiding.
Members present: Representatives Murphy, Burgess,
Blackburn, Gingrey, Olson, Griffith, Johnson, Long, Ellmers,
Barton, Terry, Upton (ex officio), DeGette, Braley, Schakowsky,
Butterfield, Castor, Tonko, Yarmuth, Green, and Dingell.
Staff present: Gary Andres, Staff Director; Charlotte
Baker, Deputy Communications Director; Mike Bloomquist, General
Counsel; Sean Bonyun, Communications Director; Matt Bravo,
Professional Staff Member; Leighton Brown, Press Assistant;
Karen Christian, Chief Counsel, Oversight; Brad Grantz, Policy
Coordinator, Oversight and Investigations; Brittany Havens,
Legislative Clerk; Sean Hayes, Deputy Chief Counsel, Oversight
and Investigations; Kirby Howard, Legislative Clerk; Alexa
Marrero, Deputy Staff Director; John Ohly, Professional Staff,
Oversight and Investigations; Mark Ratner, Policy Advisor to
the Chairman; Krista Rosenthall, Counsel to Chairman Emeritus;
Tara Rothschild, Professional Staff, Oversight and
Investigations; Tom Wilbur, Digital Media Advisor; Phil
Barnett, Democratic Staff Director; Peter Boduer, Counsel;
Brian Cohen, Democratic Staff Director, Oversight and
Investigations, Senior Policy Advisor; Lisa Goldman, Counsel;
Kiren Gopal, Democratic Counsel; Elizabeth Letter, Press
Secretary; and Stephen Salsbury, Democratic Investigator.
OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Murphy. We now convene this hearing of the Oversight
and Investigations Subcommittee, entitled, ``The GM Ignition
Switch Recall: Investigation Update.'' I thank my colleagues
and representatives for being here.
Ms. Barra, when you were before this committee almost 3
months ago, you could not answer many of this subcommittee's
questions about why it took General Motors years to figure out
why the airbags in the Cobalts, Ions, and HHRs, were not
deploying when they should have. It took GM years before
finally issuing a safety recall.
Now Mr. Valukas has made public his report on the GM fiasco
in which he concludes there doesn't appear to be a case of a
cover-up or a conspiracy. Instead, according to Mr. Valukas'
report, GM's failure to recall faulty vehicles was a case of
incompetence and neglect. Perhaps this report should have been
subtitled, Don't Assume Malfeasance When Incompetence Will Do.
I still have questions about whether GM employees knowingly
withheld information during previous liability lawsuits;
information that could have led to an earlier recall, and
prevented some of these tragedies from occurring.
In many ways, the facts surrounding what finally resulted
in the GM recall are far more troubling than a cover-up. GM
engineers and attorneys who were given the facts, including
reports on stalls and airbag malfunctions, and who were tasked
with figuring out what went wrong, did not connect the dots.
That is because they were either incompetent or intentionally
indifferent.
Today, I want to know from both Ms. Barra and Mr. Valukas
not just how it happened, but why did this happen.
Even when a good law, like the TREAD Act of 2000, is in
place, it requires people to use commonsense, value a moral
code, and have a motivation driven by compassion for it to be
effective. Here, the key people at GM seemed to lack all of
these in a way that underscores that we cannot legislate
commonsense, mandate morality, nor litigate compassion, and at
some point it is up to the culture of the company that has to
go beyond paperwork and rules.
The failures at General Motors were ones of accountability
and culture. If employees do not have the moral fiber to do the
right thing, and do not have the awareness to recognize when
mistakes are being made, then the answer must be to change the
people or change the culture. That is a lesson another large
organization under congressional scrutiny should have also
taken heart. I hope officials from the Veterans Affairs
Department are watching.
What is particularly frustrating about GM is that the
company appeared in no great hurry to figure out the problems
with its vehicles. Despite customer complaints, reports from
GM's own engineers that they were able to turn off the ignition
switch with their knees during test drives, and finally reports
of deaths, it was not until 2009 that GM figured out the
airbags had any connection to the power mode status of the car.
Then, it took another 4 years to link that finding to one of
the components that determines the power mode; the ignition
switch. And that discovery was not a result of GM's own
investigative work, but raised in the course of a lawsuit
brought by the family of a young woman who died behind the
wheel of a Cobalt. How was this discovered?
An investigator for the family simply took two ignition
switches apart and compared them; something GM failed to do
during over 7 years of investigations into the mystery of
Cobalt airbag non-deployment.
Ms. Barra, you sought this internal investigation of the
ignition switch recall and you have publicly acknowledged how
troubling its findings are. Your company has cooperated with
this committee's investigation, and I thank you for that. You
have taken corrective action by changing procedures and trying
to remove roadblocks to make sure safety concerns come to
light. Based on this report, though, there are no easy fixes
for the kind of systemic, cultural breakdowns and fundamental
misunderstandings that permitted GM engineers not to suspect a
safety problem when Cobalts were stalling due to a faulty
ignition switch.
The possibility that these problems are pervasive and
cultural deeply concerns me. It concerns us all. We learned
Monday that GM has announced yet another recall; its thirty-
ninth since January. This one is hauntingly similar to the
Cobalt ignition switch recall. The ignition switch in certain
Buicks, Chevys, and Cadillacs inadvertently moves out of the
run position if the key has too much weight on it, causing the
car to lose power and stall. The model years for the recalled
vehicles goes back to the year 2000.
Mr. Valukas, your report tells us about the engineering and
legal findings with GM, but what it doesn't divulge is whether
GM attorneys made conscious decisions during discovery in other
product liability lawsuits that prevented the truth from coming
out sooner and potentially saving lives. That kind of
malfeasance should be the crux of a cover-up. I want to delve
deeper into that issue today and find out if that occurred.
A harder question to answer, and for you, Ms. Barra, to
solve, is to why this happened. We know engineers approved a
part that did not meet GM specifications. Why? Was it a cost
concern? Was it a rush to get a car off the road? Was it just
sloppy? When complaints were raised about Cobalt's ignition
switch almost as soon as the car was on the road, why did the
engineers not diagnose stalling as a safety problem? Again, was
this a lack of basic education about how the car worked, or is
it something less specific, but more difficult to address: a
culture that does not respect accountability and that does not
take responsibility for problems. When investigations drifted
for years, there seems to be little to no evidence to suggest
that this troubled anyone. Some of this is undoubtedly poor
information-sharing and silos, and a failure to properly
document change orders. But why didn't anyone at GM ask: we
have known for years we have an airbag system that isn't
working when it should; when are we going to do something about
it?
Ms. Barra and Mr. Valukas, I thank you for being here
today. I look forward to your testimony.
[The prepared statement of Mr. Murphy follows:]
Prepared statement of Hon. Tim Murphy
Ms. Barra, when you were before this committee almost 3
months ago, you could not answer many of this subcommittee's
questions about why it took General Motors years to figure out
why the airbags in its Cobalts, Ions, HHRs were not deploying
when they should have. It took GM years before finally issuing
a safety recall.
And now, Mr. Valukas has made public his report on the GM
fiasco in which he concludes there doesn't appear to be a case
of a cover-up or a conspiracy. Instead, according to Mr.
Valukas' report, GM's failure to recall faulty vehicles was a
case of ``incompetence and neglect.''
I still have questions about whether GM employees knowingly
withheld information during previous liability lawsuits -
information that could have led to an earlier recall and
prevented some of these tragedies from occurring.
In many ways the facts surrounding what finally resulted in
the GM recall are far more troubling than a cover-up. GM
engineers and attorneys who were given the facts--including
reports on stalls and airbag malfunctions--and who were tasked
with figuring out what went wrong--didn't connect the dots.
That's because they were either incompetent or intentionally
indifferent.
Today, I want to know from both Ms. Barra and Mr. Valukas
not just how it happened but why did this happen.
Even when a good law like the TREAD Act of 2000 is in place
it requires people to use common sense, value a moral code, and
have a motivation driven by compassion for it to be effective.
Here the key people at GM seemed to lack all of these in a way
that underscores that we cannot legislate common sense, mandate
morality, nor litigate compassion. At some point, it's up to
the culture of the company that has to go beyond paperwork and
rules.
The failures at GM were ones of accountability and culture.
If employees do not have the moral fiber to do the right thing,
and do not have the awareness to recognize when mistakes are
being made, then the answer must be to change the people or
change the culture.
That's a lesson another large organization under
congressional scrutiny should also take to heart; I hope
officials from the Department of Veterans Affairs are watching.
What is particularly frustrating about GM is that the
company appeared in no great hurry to figure out the problems
with its vehicles. Despite customer complaints, reports from
GM's own engineers that they were able to turn off the ignition
switch with their knees during test drives, and finally reports
of deaths--it wasn't until 2009 that GM figured out the airbags
had any connection to the power mode status of the car.
Then, it took another four years to link that finding to
one of the components that determines the power mode--the
ignition switch. And that discovery was not a result of GM's
own investigative work, but raised in the course of a lawsuit
brought by the family of a young woman who died behind the
wheel of a Cobalt.
How was this discovered?
An investigator for the family simply took two ignition
switches apart and compared them--something GM failed to do
during the over seven years of investigations into the mystery
of Cobalt airbag non-deployments.
Ms. Barra--you sought this internal investigation of the
ignition switch recall and you have publicly acknowledged how
troubling its findings are. Your company has cooperated with
this committee's investigation. You have taken corrective
action by changing procedures and trying to remove roadblocks
to make sure safety concerns come to light. Based on this
report, though, there are no easy fixes for the kinds of
systemic, cultural breakdowns and fundamental misunderstandings
that permitted GM engineers not to suspect a safety problem
when Cobalts were stalling due to a faulty ignition switch.
The possibility that these problems are pervasive and
cultural deeply concerns me. We learned Monday that GM has
announced yet another recall--it's thirty-ninth since January.
This one is hauntingly similar to the Cobalt ignition switch
recall. The ignition switch in certain Buicks, Chevys, and
Cadillacs inadvertently moves out the ``Run'' position if the
key has too much weight on it, causing the car to lose power
and stall. The model years for the recalled vehicles goes back
to the year 2000.
Mr. Valukas--your report tells us about the engineering and
legal failings with GM, but what it doesn't divulge is whether
GM attorneys made conscious decisions during discovery in other
product liability lawsuits that prevented the truth from coming
out sooner and potentially saving lives. That kind of
malfeasance would be the crux of a cover-up. I want to delve
deeper into that issue today.
A harder question to answer--and for you, Ms. Barra to
solve--is why did this happen. We know engineers approved a
part that did not meet specifications. Why? Was it a cost
concern? Was it a rush to get a car on the road? Was it just
sloppy? When complaints were raised about the Cobalt's ignition
switch almost as soon as the car was on the road, why did
engineers not diagnose stalling as a safety problem? Again, was
this a lack of basic education about how the car worked--or is
it something less specific, but more difficult to address: a
culture that does not respect accountability and that does not
take responsibility for problems. When investigations drifted
for years, there seems to be little to no evidence to suggest
that this troubled anyone. Some of this is undoubtedly poor
information sharing and silos--and a failure to properly
document change orders. But why didn't anyone at GM ask: we
have known for years we have an airbag system that isn't
working when it should--when are we going to do something about
it?
Ms. Barra and Mr. Valukas, I thank you for being here today
and I look forward to your testimony.
Mr. Upton. And I now turn to Ms. DeGette for 5 minutes.
OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF COLORADO
Ms. DeGette. Thank you, Mr. Chairman.
Mr. Chairman, we are still trying to unravel the facts that
led to one of the worst automated tragedies of the last decade,
and that is the installation of these faulty ignition switches
in GM vehicles that we know has caused over a dozen deaths.
These switches were bad from the start; they should have never
been installed, and once they were installed, it became quickly
clear to GM officials that something was very, very wrong with
them. Disturbingly, the company left these unsafe vehicles on
the road for over a decade.
Mr. Valukas, you have done important work describing how a
defect known to GM employees for over a decade went unaddressed
for so long. This report paints a troubling picture of GM's
culture and commitment to safety that allowed this tragedy to
take place. It describes engineering and investigative
failures, a lack of urgency in addressing issues, poor
communication within the company, and numerous other systemic
problems, and, in the end, the company failed to inform
customers and federal regulators of the deadly problem. But the
report, unfortunately, does not answer all of the key
questions. It does not fully explain how the ignition switch
was approved without meeting specifications, and then how it
was redesigned in 2006. It does not fully explain why stalling
was not considered a safety issue within GM. And most
troubling, as the chairman alluded to, the report does not
fully explain how this dysfunctional company culture took root
and persisted. The report singles out many individuals at GM
who made poor decisions or failed to act, but it doesn't
identify one individual in a position of high leadership who
was responsible for these systemic failures. The report
absolves previous CEOs, the legal department, Ms. Barra, and
the GM Board from knowing about the tragedy beforehand. This is
nothing to be proud of. That the most senior GM executives may
not have known about a defect that caused more than a dozen
deaths is, frankly, alarming and does not absolve them of
responsibility for this tragedy.
Ms. Barra, while you are a new CEO, you have a decades-long
history with GM. From 2011, you were executive vice president
of global product development, and the GM staff responsible for
vehicle safety reported either directly or through a chain of
command to you. At least one high-level executive who was
working on solutions to the ignition switch problem reported
directly to you. So while you may not have known about this
defect, many people who worked for you did.
The culture of a company is shaped by its senior
leadership. They set the tone and shape the attitudes of the
employees. They are also responsible for putting in place
systems to foster transparency, and ensure that safety issues
are taken seriously. Those systems failed at GM.
Today, what I want to know are specific answers to how the
culture of secrecy at GM can be changed to encourage reporting
of problems, not just structural management changes. I
appreciate, Ms. Barra, the changes you have made at GM so far,
but I think the jury is still out on whether we can have
success in changing the culture.
Last week, as the chairman mentioned, GM announced the
recall of over 500,000 late-model Chevy Camaros, including 2014
model year vehicles, because of ignition switch problems. And
Monday evening, just a couple of days ago, another 3.3 million
cars with ignition switch and engine shut-off issues were
recalled, including Chevy Impalas that are currently in
production. This means that this year alone, GM has announced
44 recalls effecting more than 20 million vehicles worldwide.
Ms. Barra, this record reinforces the notion that the
safety problems with the Cobalt and Ion were not unique at GM,
and that the senior executives at the company, including you,
should have acted sooner to resolve the company's culture.
So now, we need to show the American public that the
changes that have been announced will really address the
longstanding problems at GM.
Mr. Chairman, Ms. Barra is not the only one with work to
do. This committee should get to work on legislation to address
the findings of our investigation. And, in these last few
minutes, I also want to acknowledge the families who are here
in the hearing room today, and their beloved loved ones with
the picture on the back wall there. I know it is not easy for
you to learn about so many things that went wrong at GM. You
have my word that we will do our best to make sure that this
kind of tragedy will never, never happen again.
And, Mr. Chairman, I know that we can work together in a
bipartisan way to do that. Thank you.
Mr. Murphy. Thank you. Gentlelady's time has expired.
I now recognize the chairman of the full committee, Mr.
Upton, for 5 minutes.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Thank you, Mr. Chairman.
Ms. Barra, we all thank you for returning to the committee
today as you said you would.
Three months ago, we held our first hearing on the GM
ignition switch recall. We asked a lot of tough questions, but
we got only a few answers. I expect things to go differently
today.
We have the Valukas report in-hand, and we have its word
seared in our minds. Our investigation tracks with the findings
of the report of maddening and deadly breakdown over a decade,
plagued by missed opportunities and disconnects. Engineers
didn't comprehend how their cars operated or how vehicle
systems were linked together. The company believed a car that
stalled while driving wasn't necessarily a safety concern.
Investigators let investigations drift for years, despite
having proof right before their eyes that an airbag system
wasn't deploying when it should have, and all of this existed
in a bureaucratic culture where employees avoided taking
responsibility with a nod of the head.
Ms. Barra, you have said you found the report deeply
troubling as well. I find it very disturbing and downright
devastating to you, to GM, to folks in Michigan who live and
breathe pride in the auto industry, but most of all to the
families of the victims.
The recall announced on Monday this week makes it painfully
clear that this is not just a Cobalt problem. A new set of
vehicles, including multiple Chevrolet, Cadillac, Buick models,
are facing an ignition switch recall for the very same kind of
torque problem that lurked for over a decade in the Cobalt and
similar small vehicles, with fatal consequences for
unsuspecting drivers, including two teens from my own
community.
Ms. Barra, Mr. Valukas, many questions today will focus on
how and why this happened. I intend to focus on how we can make
sure it never happens again. A culture that allowed safety
problems to fester for years will be hard to change, but if GM
is going to recover and regain the public's trust, it has to
learn from this report and break the patterns that led to this
unimaginable systematic breakdown. I want specifics on whether
the changes you have already put in place really have made a
difference.
With the Valukas report, GM is provided an assessment of
what went wrong. I want to be clear today that our
investigation does continue. This committee has reviewed over
one million pages of documents, and interviewed key personnel
from GM and NHTSA. While we are addressing GM's actions in
response today, we will address NHTSA's part of the story in
the near future. We don't yet have all the answers about what
changes in our laws, the regulators' practices, or the
company's culture, would have prevented this safety defect from
lingering so long or harming so many, but we are going to find
out. Yes, we will. The system failed and people died, and it
could have been prevented.
I yield the balance of my time to Dr. Burgess.
[The prepared statement of Mr. Upton follows:]
Prepared statement of Hon. Fred Upton
Ms. Barra, thank you for returning back to the committee
today. Three months ago we held our first hearing on the GM
ignition switch recall. We asked a lot of questions, but we got
few answers. I expect things to go differently today.
We have the Valukas report in hand, and we have its words
seared in our minds. Our investigation tracks with the findings
of the report: a maddening and deadly breakdown over a decade
plagued by missed opportunities and disconnects. Engineers
didn't comprehend how their cars operated or how vehicle
systems were linked together. The company believed a car that
stalled while driving wasn't necessarily a safety concern.
Investigators let investigations drift for years despite having
proof right before their eyes that an airbag system wasn't
deploying when it should have. And all of this existed in a
bureaucratic culture where employees avoided taking
responsibility with a nod of the head.
Ms. Barra, you have said you found this report deeply
troubling. I find it deplorable, disturbing, and downright
devastating--to you, to GM, to folks in Michigan who live and
breathe pride in our auto industry, but most of all, to the
families of the victims.
The recall announced on Monday makes it painfully clear
this is not just a Cobalt problem. A new set of vehicles--
including multiple Chevrolet, Cadillac, and Buick models--are
facing an ignition switch recall for the very same kind of
torque problem that lurked for over a decade in the Cobalt and
similar small vehicles, with fatal consequences for
unsuspecting drivers--including two teenagers from my own
community.
Ms. Barra and Mr. Valukas, many questions today will focus
on how and why this happened. I intend to focus on how we can
make sure it never happens again. A culture that allowed safety
problems to fester for years will be hard to change. But if GM
is going to recover and regain the public's trust, it must
learn from this report and break the patterns that led to this
unimaginable systemic breakdown. I want specifics on whether
the changes you have already put in place have made a
difference.
With the Valukas report, GM has provided its assessment of
what went wrong. I want to be clear today that our
investigation continues. This committee has reviewed over one
million pages of documents and interviewed key personnel from
GM and NHTSA. While we are addressing GM's actions and response
today, we will address NHTSA's part of this story in the near
future. We don't yet have all the answers about what changes in
our laws, the regulator's practices, or the company's culture
would have prevented this safety defect from lingering so long
or harming so many. But we will find out. The system failed and
people died, and it could have been prevented.
Mr. Upton. I yield the balance of my time to Dr. Burgess.
Mr. Burgess. I thank the chairman of the full committee for
yielding.
We now know this is not an evidence problem. The evidence
is simply overwhelming. It is an analysis problem. General
Motors still needs to answer the fundamental question of how it
missed all of these glaring signs. Indeed, failure to recognize
the problems in a timely fashion may well have cost 13 people
their lives.
This report is deeply troubling. Maybe the most concerning
aspect of the report is the simple recognition that, while
everyone at General Motors had responsibility to fix the
problem, no one took responsibility. That is unacceptable for
one of America's flagship companies, and one that millions of
us rely upon every day. Now, according to the report by Mr.
Valukas, he offers 90 recommendations as to the problems and
their failures that led to the ignition recall. I am certain
that all 90 are crucial, but really, only one; accountability,
and accountability that is not transferrable, is crucial. If
personal accountability is missing, as the report here
suggests, then disastrous consequences will not only occur,
they will reoccur and reoccur.
Ms. Barra, Mr. Valukas, I thank you for being here in our
committee today. The Valukas report is a start, a first step to
solving a problem by identifying it. I hope also there are some
answers for many of us as to the effect of now the
understanding of the problem, and when the understanding
occurred. Will this affect those cases that have already been
litigated? How does General Motors' bankruptcy affect its
position on those cases that were previously litigated, and
perhaps we can even touch on Mr. Feinberg's employment. Is he
an employee of GM, or is he working for the crash victims. All
of these questions need to be answered today, and I look
forward to your testimony, and thank you.
Mr. Murphy. The gentleman yields back.
I now recognize Ms. Schakowsky for 5 minutes.
OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS
Ms. Schakowsky. I thank you, Mr. Chairman, for holding this
hearing; the second on the failure to recall defective GM
vehicles in a timely manner, and I thank our witnesses for
being here.
As I said at our first hearing on this issue, the families
of the victims of GM's defective vehicles deserved better. GM
failed you. We are looking at those pictures in the back of the
room and they need more than an apology.
On June 5, Mr. Valukas, who is well known in Chicago where
I come from and well respected there, reviewed GM's ignition
switch failures and his report was released on June 5. The
report characterized GM as a company with a convoluted
structure and very little accountability, a place where there
was an institutional failure to communicate and coordinate both
within and between different departments. There is a story
today in Bloomberg Businessweek about a whistleblower who
apparently tried to bring these problems to the attention of
the company and lost his job as a result.
During her previous appearance before the subcommittee, Ms.
Barra repeatedly pointed to the importance of the Valukas
report in addressing the many questions that she was not able
to answer. I look forward to getting answers to those questions
today.
A question I raised at our last hearing has yet to be
answered to my satisfaction, and that is how GM will compensate
those who were injured or who lost loved ones in crashes prior
to GM's bankruptcy in 2009. Ms. Barra said that it would take
her and Kenneth Feinberg, who was selected to advise GM on
options of how to establish a victims' compensation fund, up to
to 60 days, from 30 to 60 days, from the time of the first
hearing to determine how to proceed with those claims. That
first hearing was April 1 and it has now been 79 days, and so I
hope we will get the answers today.
As Ms. Barra said when the Valukas report became public,
``We failed these customers, and we must face up to it, and we
must learn from it.''
While 15 GM employees have been dismissed, it is not clear
to me that any senior-level manager has been held responsible
for the GM corporate culture that allowed the ignition switch
defect to go unaddressed for years after it was first
discovered in 2001. The question now is how far accountability
extends at GM. As executive vice president of global product
development, purchasing and supply from 2011, until taking over
last year as CEO, Ms. Barra, my understanding is, was
responsible for safety issues at the company. The Valukas
report suggests that senior management at GM was unaware until
2013 that serious questions should have been asked about the
ignition switch defect, however, two newspapers, including the
New York Times, addressed the ignition switch defect in 2005.
Now, if I were a senior-level executive that read about those
problems in the newspaper, I would want answers and action. It
seems GM executives demanded neither.
The Valukas report does make several suggestions on
changing the corporate climate at GM, to respond faster and
better to safety issues, and that includes improving
communications with the National Highway Traffic Safety
Administration, NHTSA, and I look forward to hearing from Ms.
Barra about the changes the company has already made, and its
plans for improvements in the future.
GM paid the maximum penalty for failing to inform NHTSA
about the ignition switch defect. That was $35 million. To me,
it sounds like a lot of money, but that is not enough of a
deterrent for a company with over $150 billion in revenue. It
sounds to me more like a slap on the wrist. I am an original
cosponsor of Ranking Member Henry Waxman's Motor Vehicle Safety
Act, H.R. 4364, which would increase the maximum penalties for
failing to inform NHTSA and the public of potentially deadly
auto defects. As the ranking member of the Commerce
Manufacturing and Trade Subcommittee, I am working on
legislation that would do the same, while also addressing
several other issues raised by the GM ignition switch defect,
including requiring the public disclosure of technical service
bulletins. Those are the bulletins which provide information to
dealerships about how to repair vehicles that are experiencing
a widespread problem kept from the public. In GM's case, TSBs
were issued for the faulty ignition switch in 2005; almost 10
years before a recall was issued. Those TSBs instructed
dealerships to replace the defective part.
I hope today's hearing will allow us to consider additional
actions that might be needed in improving auto recalls, and I
look forward to hearing from our witnesses.
I yield back.
Mr. Murphy. Thank you.
I would now like to introduce the witnesses on the panel
for today's hearing. Ms. Mary Barra is the Chief Executive
Officer for General Motors Company, and has been in this role
since January 15, 2014, when she also became a member of its
board of directors. She has been with the company over 30
years, and has held a number of positions in the company,
including vice president of global manufacturing engineering
from 2008 to 2009, and executive director of vehicle
manufacturing engineering from 2005 to 2008. Mr. Anton Valukas
is a litigator and the chairman of Jenner and Block. He is a
former U.S. attorney and fellow of the American College of
Trial Lawyers. He was hired by the General Motors corporation
to conduct the internal investigation into the faulty ignition
switch, and he is the author of the report on the findings that
was released 2 weeks ago.
I will now swear in the witnesses.
You are both aware that the committee is holding an
investigative hearing, and when doing so, has the practice of
taking testimony under oath. Do you have any objections to
testifying under oath? Both witnesses say they do not. The
Chair then advises you that under the rules of the House and
the rules of the committee, you are entitled to be advised by
counsel. Do either of you desire to be advised by counsel
during your testimony today? Both decline. Thank you. In that
case, if you would please rise and raise your right hand, I
will swear you in.
[Witnesses sworn.]
Mr. Murphy. Thank you. Both witnesses answered in the
affirmative. You are now under oath and subject to the
penalties set forth in Title XVIII, Section 1001 of the United
States Code. You may now each give a 5-minute summary of your
written statement.
Ms. Barra, would you like to open? Thank you. Please pull
the microphone close to you. Thank you. You have to turn it on
as well. I think there is a--thank you.
TESTIMONY OF MARY T. BARRA, CHIEF EXECUTIVE OFFICER, THE
GENERAL MOTORS COMPANY; AND ANTON R. VALUKAS, JENNER AND BLOCK
TESTIMONY OF MARY T. BARRA
Ms. Barra. Thank you, Mr. Chairman. I appreciate the chance
to appear before you again today on the ignition switch issue.
Before I proceed with my brief remarks, I want to again
express my sympathies to the families that lost loved ones, and
those who suffered physical injury. I am ever mindful that we
have a special responsibility to them and to those families,
and the best way to fulfill that responsibility is to fix the
problem by putting in place the needed changes to prevent this
from every happening again.
When I was here 11 weeks ago, I told you how we intended to
proceed with this matter. I promised we would conduct a
comprehensive and transparent investigation into the causes of
the ignition switch problem. I promised we would share the
findings of Mr. Valukas' report with Congress, our regulators,
NHTSA and the courts. I promised we would hold people
accountable, and make substantial and rapid changes in our
approach to recalls. Finally, I promised we would engage Ken
Feinberg to develop a just and timely program for compensating
families who lost loved ones, and those who suffered serious
physical injury. We have done all of these things and more, and
I welcome the opportunity to discuss them with you further.
The Valukas report, as you know, is extremely thorough,
brutally tough and deeply troubling. It paints a picture of an
organization that failed to handle a complex safety issue in a
responsible way. I was deeply saddened and disturbed as I read
the report. For those of us who have dedicated our lives to
this company, it is enormously painful to have our shortcomings
laid out so vividly. There is no way to minimize the
seriousness of what Mr. Valukas and his investigators
uncovered.
On June 2, Mr. Valukas presented the findings of his
investigation to the Board of Directors of General Motors. I
will leave it to Mr. Valukas to comment on his report, but for
my part, I want you to know my reaction to the report and some
of the actions I have taken since reviewing it.
First, we have made a number of personnel decisions.
Fifteen individuals identified in the report are no longer with
the company. We have restructured our safety decisionmaking
process to raise it to the highest levels of the company,
addressing a key point in the Valukas report that critical
information was kept from senior management. Under the new
system, this should never happen again.
We are currently conducting what I believe is the most
exhaustive comprehensive safety review in the history of our
company. We are leaving no stone unturned, and devoting
whatever resources it takes to identify potential safety issues
in all of our current vehicles and on vehicles no longer in
production. Our responsibility is to set a new norm and a new
industry standard on safety and quality. I have told our
employees it is not enough to simply fix this problem; we need
to create a new standard, and we will create a new norm.
We have announced the creation of, and have implemented, a
new global product integrity organization that is already
enhancing the overall safety and quality of our products, and
we are taking a very aggressive approach on recalls, and we are
bringing greater rigor and discipline to our analysis and
decisionmaking process regarding these recalls and other
potential safety-related matters. It is difficult to announce
so many recalls, but it is absolutely the right thing to do.
As we discussed last time, we have engaged Kenneth Feinberg
to review options for establishing a compensation program, and
the process is moving rapidly. Mr. Feinberg has the full
authority to establish eligibility criteria for victims, and to
determine the compensation levels. He has indicated he will
share his final criteria with us by the end of this month, and
we expect to begin processing claims by August 1.
We have created a new position of vice president of global
vehicle safety, and appointed Jeff Boyer, who is a highly
respected expert in the field, to this position. I have
personally told Jeff that he will have whatever resources he
needs to do the job, and he has many already. In fact, we have
also named a senior attorney to support him and to facilitate
rapid information sharing across the organization. In addition,
we have added 35 safety investigators that are already allowing
us to identify and address safety issues much more quickly. And
finally, we have instituted a Speak Up For Safety program,
encouraging employees to report potential safety issues
quickly, and we are recognizing them when they do so. This is
more than a campaign or a program, it is the start of changing
the way we think and act at General Motors.
Two weeks ago, I addressed the entire global workforce
about the report. I told our team as bluntly as I knew how that
the series of questionable actions and inactions uncovered in
the investigation were inexcusable. I also told them that while
I want to solve the problems as quickly as possible, I never
want anyone associated with GM to forget what happened. I want
this terrible experience permanently etched in our collective
memories. This is not another business challenge. This is a
tragic problem that should never have happened, and must never
happen again.
The report makes a series of recommendations in 8 major
areas. I have committed the company to act on all of the
recommendations, and many of which we had started before and
are already implemented.
Finally, Mr. Chairman, and members of the committee, I know
some of you are wondering about my commitment to solve deep
underlying cultural problems that were uncovered in the report.
The answer is simple. I will not rest until these problems are
resolved. As I told our employees, I am not afraid of the
truth, and I am not going to accept business as usual at GM. It
is time, in fact, it is past time, to insist on total
accountability, and to make sure vital information is shared
across all functions of the company, so we can unleash the full
power of our 200,000 employees, our 21,000 dealers, and our
23,000 suppliers. We are a good company, but we can and must be
much, much better.
This is my focus, and this is my promise to you, our
employees, our customers, our shareholders, and the American
people.
Thank you again for having me here today. I am pleased to
take your questions.
[The prepared statement of Ms. Barra follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Murphy. Thank you, Ms. Barra.
Mr. Valukas, you are recognized for 5 minutes.
TESTIMONY OF ANTON R. VALUKAS
Mr. Valukas. Have I got it?
Mr. Murphy. You have to bring that very close to your
mouth, and lift it up and----
Mr. Valukas. All right. Thank you, Mr. Chairman.
Mr. Murphy. Even closer if you would, sir.
Mr. Valukas. Even closer?
Mr. Murphy. Yes.
Mr. Valukas. OK. Thank you. Now I have it? OK, thank you.
Thank you, Mr. Chairman.
In March of this year, General Motors asked me to determine
why it took so long to recall the Cobalt and other vehicles
that contained this faulty and defective switch, which has
resulted in such disaster for General Motors and for the
families who were involved in this matter. My explicit mandate
from the General Motors Board of Directors was to promote and
provide an unvarnished report as to how and why this occurred,
to pursue the facts wherever they took us, and to report those
facts in a report. General Motors' Board also directed me to
make recommendations based on those factual findings to help
them ensure that this did not happen again.
Jenner and Block, my firm, was given unfettered access to
General Motors witnesses and documents. In point of fact, we
interviewed, in the 70 days or so, 230 witnesses, some of them
multiple times, so we had about approximately 350 interviews,
some of them lasting 6 to 8 hours. We viewed over 41 million
documents, coming from the files of everybody from the top
executives down to the individuals who were involved at the
most technical level. A number of documents involved tens of
millions of materials that were personally reviewed by
individual reviewers, and all of this was in an effort to find
out the facts as to why this Cobalt recall took over a decade,
and why that defective switch remained unaccounted for during
that period of time.
A copy of that report was provided to the committee. I am
not going to go through the details, but the story of the
Cobalt is a story of individual and organizational failures
that have led to devastating consequences. Throughout the
decade it took General Motors to recall the Cobalt, there was,
as has already been described here this morning by one of the
Members, a lack of accountability, a lack of urgency, and
extraordinarily a failure of the company personnel charged with
safety issues to understand how this car was manufactured, and
the interplay between the switch and other aspects of the
automobile.
In our report, we reviewed these failures, and identified
cultural issues that may have contributed to this problem. As
General Motors' Board requested, we have provided
recommendations to help ensure that this problem does not take
place in the future, but as we note in my written statement to
you, that is an issue with which GM must deal. The report does
not give all of the answers.
Thank you.
[The prepared statement of Mr. Valukas follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Murphy. Thank you very much.
Now I recognize myself for 5 minutes of questions.
Mr. Valukas, your report references such terms as the GM
nod and the GM salute, where people nod in agreement and do
nothing or look to others to do something, but no one accepts
responsibility.
Ms. Barra, do you agree with Mr. Valukas when he states
that culture is the problem at GM, that a culture where GM
personnel failed to recognize significant issues to
decisionmakers, delayed the ignition switch recalls?
Ms. Barra. I agree that there are specific people involved
that did not act appropriately.
Mr. Murphy. You have been with the company for 30 years,
right?
Ms. Barra. Yes, I have.
Mr. Murphy. How does someone who has spent an entire career
within the culture of GM change the culture of GM? I believe
there are 210,000 employees or so with GM. You mentioned 15
were fired.
Ms. Barra. Yes.
Mr. Murphy. That is 99.999 percent, if my math is right, of
the people are the same. If you haven't changed the people, how
do you change the culture?
Ms. Barra. Well, again, the 15 people that are no longer
with the company are the people that either didn't take action
they should, or didn't work urgently enough to rectify this
matter, and they are no longer part of this company. That was a
strong signal to send within the company. Again, what is much
more important is that we create the right environment where
everyone in the company is able to come to work every day and
do their best work, be supported, and that is the culture that
we are working to create, that is the programs we have put in
place, like Speak Up For Safety, and the structural changes we
have made.
Mr. Murphy. The previously-referenced article by Bloomberg
notes that Courtland Kelley, who worked on the Cavalier, the
predecessor to the Cobalt, raised questions about a defective
fuel line. He had to continue to do that, even threatening in
moving forward with whistleblower actions. This was referenced
on page 93, Mr. Valukas, of your report where it says, ``Oakley
also noted, however, that he was reluctant to push hard on
safety issues because of his perception that his predecessor
had been pushed out of the job for doing just that.''
I guess this speaks to the question of what is a cover-up.
Mr. Valukas, you concluded there was no conspiracy and no
cover-up. Does an employee acting alone, who hides or doesn't
share information, a cover-up?
Mr. Valukas. I am sorry. Can--the latter part of the--the
last part?
Mr. Murphy. Does an employee who acts alone, or who hides
or doesn't share information, a cover-up?
Mr. Valukas. If the individual knows that the information
is, for instance, a safety information, and understands that
and deliberately decides to conceal that, that is a cover-up,
yes, it is.
Mr. Murphy. And on a corporate culture of carelessness,
where lifesaving information sits in file boxes collecting
dust, as you referred to, is that a cover-up?
Mr. Valukas. What we found in connection with this, Mr.
Chairman, was the following. We found that a large number of
individuals had information that they--in the first instance,
they didn't believe was safety-related information. Clearly up
until about 2009, they looked at this as a convenience matter,
and they dealt with it that way. We did not find evidence that
any individual had a piece of evidence in connection with this
Cobalt recall which they considered to be safety information,
which they deliberately withheld from somebody else.
Mr. Murphy. You put in your report though that Mr. Oakley
specifically says he is reluctant to push hard on safety
issues.
Mr. Valukas. I am sorry?
Mr. Murphy. You put in your report where Mr. Oakley
specifically says, on page 93, he was reluctant to push hard on
safety issues because of his perception that his predecessor
had been pushed out of a job. That implies he withheld safety
information.
First of all, Ms. Barra, is he still working for you?
Ms. Barra. Yes, he is, and actually he has raised issues
and we are actively investigating. It is part of our Speak Up
For Safety program.
Mr. Murphy. Well, it sounds like he decided not to speak
up.
Ms. Barra. Well, he is now, and we are taking it very
seriously.
Mr. Murphy. I just find it hard to believe that of 210,000
employees, not a single one in that company had the integrity
to say, I think we are making a mistake here. Not a single one.
That is puzzling to me. I mean even out at the VA Hospital, we
have lots of whistleblowers. I don't see here in GM that there
are whistleblowers. Not a single person you interviewed in
this?
Mr. Valukas. Well----
Mr. Murphy. Well, let me jump to another question. I am
going to get back to this, because there were also a lot of
issues about lawsuits. You referenced some of those, but what I
don't see here is questions, if GM responded appropriately to
victims' discovery requests in the lawsuits, including what GM
understood about the airbag deployment. Did you find that--I
don't know if you spoke with plaintiffs' attorneys in this
case, but did you find that in every case that information
requested of GM was responded to in a timely manner of the
plaintiffs' attorneys' request, and that the information they
presented to GM was responded to?
Mr. Valukas. Mr. Chairman, what we did was we--and at the
very beginning of this investigation I sent letters and e-mail
to the key plaintiffs' lawyers who were involved, and where
there would be--in the most sensitive of these cases, I don't
want to mention family names, but including the case that
resulted in the disclosure of the two switches, inviting them
to contact me so that we could talk in the investigation,
determine that very issue, that deal with that issue. Not one
of those attorneys responded to me. I also interviewed the
attorneys who were outside counsel in connection with the GM
matters, the particular piece of litigation, determine whether
I had any evidence there of something which would indicate that
GM had particular facts which they were withholding in order to
accomplish something, and I did not find evidence of that in my
discussions with outside counsel.
I reviewed all of the e-mail relating to the legal
department in connection with all of these cases. And I say I.
Jenner and Block did, I didn't interview them personally, to
determine whether there was any evidence that there was
information that they had that they were now making a decision,
for instance, to settle a case because they wanted to conceal
the safety defect and prevent a recall, and I did not find
information such as that, so----
Mr. Murphy. I appreciate that. I am out of time, but I want
to say there is a difference between not getting a response and
not having the facts, and my assumption is when you tasked Mr.
Valukas with getting all the information, if you don't have
this information, do you still want it?
Ms. Barra. I----
Mr. Murphy. The information with regard to if information
was not passed on to plaintiffs' attorneys who had made the
request, do you still want that information? That is what I--I
am out of time. I will go to Ms. DeGette.
Ms. DeGette. Thank you, Mr. Chairman.
Mr. Valukas, the Chairman just asked Ms. Barra about this
GM nod and GM salute that you talked about in your report on
page 255 and 256, where you said one witness described the GM
phenomenon of avoiding responsibility as the GM salute, a
crossing of the arms and pointing outwards to others,
indicating the responsibility belongs to someone else, not me.
And then you said, similarly, Mary Barra described a phenomenon
known as the GM nod. The GM nod Barra described as when
everyone nods in agreement a proposed plan of action, but then
leaves the room with no intention to follow through, and the
nod is an empty gesture.
When the Chairman just asked Ms. Barra about this, she
said, ``There were specific people involved that did not act
appropriately.'' Do you think this company culture, the GM nod
and the GM salute, was just limited to those 15 people who have
been terminated from GM, yes or no?
Mr. Valukas. I can't tell--I can't answer that question.
Ms. DeGette. Do you think it was only 15 people who did
this GM nod and salute?
Mr. Valukas. No, I think there were a number of people----
Ms. DeGette. Thank you.
Mr. Valukas [continuing]. Who were on the committees.
Ms. DeGette. Thank you.
Mr. Valukas. OK.
Ms. DeGette. And you learned that although the problems
with the ignition switch's safety issues were known by many in
the company, GM senior leadership, including Ms. Barra, was
unaware of these issues for years. Is that correct?
Mr. Valukas. That is factually correct.
Ms. DeGette. Thank you. These leaders included GM CEOs,
including Rick Wagner, Mike Millikin, who was then GM's general
counsel, and Ms. Barra, correct?
Mr. Valukas. That is correct.
Ms. DeGette. And, Ms. Barra, you previously testified that
you didn't know about the problems with the ignition switch
until December 2013, is that correct?
Ms. Barra. I testified I knew there was an issue with the
Cobalt in December that they were studying. I knew there was an
ignition switch issue on January 31, that's what I testified.
Ms. DeGette. In December 2013, right?
Ms. Barra. January 31, 2014, was when I knew----
Ms. DeGette. OK.
Ms. Barra [continuing]. There was an ignition----
Ms. DeGette. Thanks.
Ms. Barra [continuing]. Switch issue.
Ms. DeGette. OK. Now, Gay Kent, who was the director of
vehicle safety in your department, she made decisions in 2004
about the stalling being a safety risk. Did she ever share
those findings with you, yes or no?
Ms. Barra. No.
Ms. DeGette. And Jim Federico, a senior GM executive,
brought in to find solutions to the airbag situation in 2012,
he knew about the problems and he reported directly to you. Did
he ever share his knowledge with you----
Ms. Barra. He----
Ms. DeGette [continuing]. Yes or no?
Ms. Barra. Well, he reported directly to me at a portion of
his time, and then he no longer reported----
Ms. DeGette. But did he ever tell you about these problems?
Ms. Barra. No he did not.
Ms. DeGette. No, he didn't. Now, you have made a number of
structural changes at GM, and I appreciate this and I know you
are committed to doing it, but the company culture is what
concerns me as well as the chairman, and the problems that I
have identified today are not problems about who reports to
whom, but rather a culture that encourages people not to stick
their necks out and report things. And, in fact, just
yesterday, I learned from a source very close to GM who has
intimate knowledge of the culture there, that the results of
Mr. Valukas' investigation and the terminations of these 15
employees have only created more paranoia within the company
that people are going to lose their jobs. And so I want to ask
you, Ms. Barra, what are you doing, not just to change the
structure and put these safety programs together and so on, but
to change the culture of the company so that the company
rewards people reporting problems, not sweeping it under the
rug?
Ms. Barra. We are doing a lot, and to your point, it is not
done by words, it is not done by slogans, it is done by
actions.
Ms. DeGette. Well, so what is it that you are doing?
Ms. Barra. So we have put the Speak Up For Safety program,
and I am getting personally information from employees. I am
acting on it, we have a regular program, we are going to be
recognizing those individuals. I have spoken to all of our
employees globally, encouraging them. But I think most
important, the work that we are doing and the actions we are
taking with the additional recalls demonstrate how sincere we
are to the customer and the center of everything we do, and we
want to make sure we are doing the right thing as it relates to
safety, as it relates for quality----
Ms. DeGette. But we----
Ms. Barra [continuing]. And our employees are seeing that.
Ms. DeGette. OK. I would like to see, if you may supplement
your answer with the specifics of how you are rewarding this.
Ms. Barra. Yes.
Ms. DeGette. I would appreciate that.
Ms. Barra. We can do that.
Ms. DeGette. Now, I want to talk to you briefly about this
compensation fund. I am pleased now that you are telling us
that Mr. Feinberg is setting up a compensation fund, but we
still don't have very many details of it. Has the company or
Mr. Feinberg determined the criteria about who will be eligible
for payment, yes or no?
Ms. Barra. He is developing that, but I think the important
point----
Ms. DeGette. So we don't have that criteria yet----
Ms. Barra. He has a----
Ms. DeGette [continuing]. Correct?
Ms. Barra. He has a draft protocol that he is getting
input. He is an independent----
Ms. DeGette. Would you please provide that to this
committee, the draft protocol?
Ms. Barra. We can.
Ms. DeGette. Thank you very much.
Ms. Barra. Can I add----
Ms. DeGette. And----
Ms. Barra [continuing]. A point?
Ms. DeGette. And--no. Let me ask you this. Will Mr.
Feinberg have discretion to make eligible for payment victims
beyond those identified by GM to date, because we are hearing
there may be up to 100 deaths from this?
Ms. Barra. We want to capture every single person who
suffered serious physical injury or lost a loved one, every
single person as a result of the ignition switch----
Ms. DeGette. So your answer is yes?
Ms. Barra. Yes.
Ms. DeGette. OK, and will those people who receive payment
through this program be required to release their legal claims?
Ms. Barra. I am sorry, the voluntary program?
Ms. DeGette. No. If they get compensated from Mr.
Feinberg's program, will they have to release their legal
claims to go to court? Do you know?
Ms. Barra. This program is in lieu of taking this to court.
Ms. DeGette. So your answer is yes?
Ms. Barra. I can't say exhaustively, but as it relates to
this specific instance, yes.
Ms. DeGette. OK, will you submit your answer please and let
me know that?
Mr. Murphy. Thank you.
Ms. DeGette. Thank you very much.
Mr. Murphy. Gentlelady's time expired.
Now recognize Mr. Upton for 5 minutes.
Mr. Upton. Thank you again.
You know, I am a firm believer that you cannot solve a
problem that you don't acknowledge or fully understand, so
while I am going to try to be very interested in forward-
looking solutions, I want to begin by walking through and
defining some key problems that we identified from this report.
First, a simple yes or no. Is it true that GM engineers did
not believe the ignition switch moving from run to accessory
and causing a stall, constituted a safety problem? First, Ms.
Barra----
Ms. Barra. Initially----
Mr. Upton [continuing]. And then----
Ms. Barra [continuing]. Yes.
Mr. Upton. And Mr. Valukas?
Mr. Valukas. Yes.
Mr. Upton. Can you confirm that a GM engineer test driving
the Cobalt in '05 experienced a shutoff after hitting the key
with his knee, and that his report on the incident was
categorized as an annoyance rather than a safety issue?
Ms. Barra. Yes, that was quite true.
Mr. Upton. So let us continue talking about how GM employee
warnings and experiences were handled. I read with a lot of
concern this morning's news coverage alleging that employee
safety concerns went unheeded. I won't ask you to respond to a
particular newspaper article, but I do want to get your
reaction to a case uncovered in our investigation about a
specific employee concern, and I want to know how it was
handled at the time and how it would be handled if it was
raised today. And you have a tab on page 83 in your binder, but
in '05, a GM employee drove an '06 Chevy Impala home from work.
When she hit a bump in the road, the ignition switch fell out
of the run position and stalled the car. Let me read you from
her e-mail, which is up on the screen, sent in October of '05
after she took the vehicle for repair. ``I think this is a
serious safety problem, especially if this switch is on
multiple programs. I am thinking big recall. I was driving 45
miles per hour when I hit the pothole and the car shut off, and
I had a car driving behind me, swerving around me. I don't like
to imagine a customer driving with their kids in the backseat
on I-75 and hitting a pothole in rush-hour traffic. I think you
should seriously consider changing this part to a switch with a
stronger detent.''
So to reiterate, nearly 9 years ago, a GM employee
suggested the stalling of the '06 Impala was a serious safety
problem, and speculated that a big recall was coming. So when
was the recall for the '06 Impala announced, do you know?
Ms. Barra. I believe that was part of Monday's----
Mr. Upton. Two days ago. Monday. Nine years ago. So looking
at that case, and looking as if it happened today, can you tell
us specifically how a concern like this would be handled if it
was raised today?
Ms. Barra. Yes. As I testified when I was here last time,
we consider a stall to be a safety issue, and so when a stall
is brought forward, if we then learn and understand it is
because of a defect in the way some part of a system in the
vehicle is working, we are going to address it. We do have to
understand stalls also happen when you run out of gas or pop
the clutch, but if we are aware of a stall, and we then learn
that it is because some part of the vehicle or a system is not
operating properly, we will immediately take action, and that
is what is represented in what we did on Monday.
Mr. Upton. Mr. Valukas, in going through the report, there
were some comments made as to the consumer friendliness of the
TREAD Act requirements in terms of complaints that were
received. What suggestions might you have relating to that, in
terms of how we proceed in the future?
Mr. Valukas. I don't have a specific legislative suggestion
for you. I did include in the recommendations something which I
think is very important for General Motors, which is they need
to look at NHTSA as a partner in this issue, and not somebody
to be held at bay, so that the transmission of information is a
free flow of information and problems are elevated at the
earliest possible point. It is clear to me from the earlier
aspects of this investigation that there were times where it
was almost an adversarial relationship rather than a passing of
information, but I don't have a legislative suggestion for you.
Mr. Upton. Ms. Barra, do you have a comment as it relates
to the compiling of the information for the TREAD Act for the
complaints?
Ms. Barra. I think it is very important that we have a
productive relationship with the Agency, with NHTSA, and I do
think there are things that can be done through the national
VIN database and also improving the search capability and
ability to use valuable information that is in the TREAD
database.
Mr. Upton. OK. I yield back.
Mr. Murphy. Thank you. I have a clarifying question based
on something Ms. DeGette and Mr. Upton said. Given that I think
GM has now recalled something like 40 million cars, do you have
a revised number on the number of deaths and crashes that may
have been associated with the faulty ignition switch? Do you
have a number yet?
Ms. Barra. The recall that we did on Monday, there's no
known--we know of no fatalities.
Mr. Murphy. But overall, related to what Ms. DeGette was
saying, is there----
Ms. Barra. With the information that we have as it relates
to the Cobalt and the population of those vehicles, the known
number we have is still 13.
Mr. Murphy. Thank you.
Recognize Mr. Dingell now for 5 minutes.
Mr. Dingell. Thank you, Mr. Chairman. Welcome to Ms. Barra
and to Mr. Valukas. We appreciate you being here today.
You, Mr. Valukas, and your team have compiled a report
about serious internal shortcomings at General Motors that has
contributed to the company's failure to report a safety defect
in the Chevrolet Cobalt. I know that Ms. Barra shares my grave
concern about the report's findings, and I look to her and the
GM leadership for establishing more responsible and
communicative cultures at GM.
We all recognize your report as not an end to the
investigation. It does impute a number of commonsense
recommendations which I feel GM should commit to implementing
in full.
My questions to Ms. Barra today will require simple yes or
no answers. Now, to Ms. Barra, we have learned that Cobalt's
ignition switch was redesigned, but it was not given a new part
number. This obfuscated the company's internal investigation,
and contributed to a delay in defect reporting and subsequent
recalls. Mr. Valukas suggests in his report that GM adopt
procedures that include a specific protocol for reviewing
authorizations of out-of-specification parts, tracking out-of-
specification parts, identifying who should be notified of
them, and identifying and elevating any particular safety
issues that might be associated with the use of out-of-
specification parts. The report goes on to suggest that high-
level review should be required before approval of use of an
out-of-specification part.
Now, does GM commit to implementing these particular
suggestions in full, yes or no?
Ms. Barra. Yes.
Mr. Dingell. Now, Ms. Barra, subsequently, Mr. Valukas
suggests in his report that GM make improvements in its problem
resolution tracking system, PRTS. More specifically, his report
suggests that the standard for closing PRTS without action is
clearly defined and sufficiently rigorous. He goes on to
suggest that PRTS should not be closed without action, absent
clear sign-off by named individuals, and appropriate levels of
review. Furthermore, his report suggests that GM reaffirm that
the lack of an acceptable business case is not an acceptable
reason for closing out a PRTS if that involves a safety issue.
Does GM commit to implementing all of these suggestions
moving forward, yes or no?
Ms. Barra. Yes.
Mr. Dingell. Now, again, Ms. Barra, likewise I think we all
agree with Mr. Valukas, that GM should implement more robust
policies and training with respect to component and vehicle
safety matters.
At the most basic level, does GM commit to training its
employees about the lessons learned from the Cobalt
investigation, yes or no?
Ms. Barra. Yes.
Mr. Dingell. Now, again, Ms. Barra, will GM train employees
to recognize and elevate safety issues, including the emphasis
on the need to identify and address safety issues actively,
regardless of whether the vehicles are in the design or
production phase, yes or no?
Ms. Barra. Yes.
Mr. Dingell. Now, again, Ms. Barra, when fostering a
culture of safety, I think we all recognize it is very
important that employees who recognize and report safety
problems in components and vehicle feel comfortable in so
doing.
As such, does GM commit to promote visibility and enforce
rigorously the non-retaliation policy contained in paragraph 19
of the May 16 NHTSA consent order, yes or no?
Ms. Barra. Yes.
Mr. Dingell. Now, Ms. Barra, it is also important that all
automakers communicate clearly and promptly with NHTSA. I said
all automakers.
Will GM create a centralized database for all
communications with NHTSA, and train its employees who
communicate with NHTSA, to file their communications in this
database, yes or no?
Ms. Barra. Yes.
Mr. Dingell. Now, do you think that that is good for other
companies?
Ms. Barra. Yes, I do.
Mr. Murphy. Gentleman's time has expired.
Mr. Dingell. Mr. Chairman, I thank you for your courtesy.
Mr. Murphy. Thank you very much.
Now recognize the vice chair of the full committee, Mrs.
Blackburn, for 5 minutes.
Mrs. Blackburn. Ms. Barra, I thank you for coming back.
I have a few questions for you, and I have to tell you,
many of my questions that I asked and couldn't get answers for
in April when you were with us, you said after Mr. Valukas
finished the report, you hoped to be able to answer these
questions.
Now, since that time, I have been able to be on the floor
at the Springhill facility which is there in my district. We
have 1,868 employees that certainly do not want the GM brand to
be tarnished by all of this, and so it is important to me on
behalf of all those constituents that we get some answers, and
that we do this very quickly. So we thank you for coming back
to us today.
I want to go back to something I asked you about in April,
and you explained that a part that doesn't meet all
specifications can still be acceptable for safety, and the
example that you used was with steel. Now, we know that the
Cobalt ignition switch was redesigned in '06, right? And
testing documents from that time show that the torque of the
redesigned switch was still below specifications, and yet after
this change, the reported incidents of non-deployment in these
vehicles dropped dramatically.
Well, when we look at that and we read those documents, and
the chairman mentioned, we have been through 1 million pages of
documents, and 15,000 pages of documents from NHTSA. So we are
not sitting idly on this, we are taking some action.
So I want you to go back through this and elaborate on your
response that something could still not meet specifications and
be acceptable for safety, and I would like to hear from you
when it is OK to deviate from specifications, and people in the
process not be aware of this.
Ms. Barra. Well, I think when you look, as you start
developing something, you have a design specification, but what
is most important, and the testing that we are doing now is--
and had done in the past, but are doing in a much more broad
fashion now, relates to the actual performance of the part and
how the part operates in a subsystem, how it operates in a
broader system, and then how it operates in the vehicle. And so
as we design now, we are validating that the part level, with
the new organization we put together called the product
integrity organization, they are actually now looking into a
much more validation as it relates to subsystems, because what
you really want to know is, as all the parts come together,
that it is going to operate as a system and perform safely.
Mrs. Blackburn. OK.
Ms. Barra. And that is what the new organization is
accomplishing.
Mrs. Blackburn. OK, so what you are saying then, if it
doesn't affect safety or effectiveness, it is OK not to meet
specifications.
Ms. Barra. I am saying there are times where, as long as--
it has to meet the performance requirements.
Mrs. Blackburn. OK, then how should an engineer evaluate
the performance, the part's performance, against the technical
specifications?
Ms. Barra. Again, there is--you look at performance against
requirements. What are the requirements of how that part needs
to behave in the system, and that is how an engineer evaluates
it. And, again, what we are doing now is taking that much more
broadly, so we are not relying on one person----
Mrs. Blackburn. OK.
Ms. Barra [continuing]. To understand across the whole
vehicle.
Mrs. Blackburn. Then in this product integrity system, how
does GM track the deviations that are occurring from the
technical specifications?
Ms. Barra. That is all captured in, you know, very specific
documents.
Mrs. Blackburn. How transparent is it? Is it transparent to
the----
Ms. Barra. It is----
Mrs. Blackburn [continuing]. Engineer?
Ms. Barra. It is available to the engineers, to the chief
engineers in the organization.
Mrs. Blackburn. OK, was this done, when the switch was
approved in '02 and redesigned in '06?
Ms. Barra. No, what I am talking about is what we have done
this year.
Mrs. Blackburn. OK, so this was not done. So we still
have--there was a glitch in the system and people approved a
part that was not OK.
Ms. Barra. Well, the problem with the specific change you
are referring to was that change was made and it was not
documented.
Mrs. Blackburn. OK, then how does a GM engineer know when
there is a deviation from a specification if it is too much or
too little, or if it is acceptable or if it is going to pose a
safety problem?
Ms. Barra. Again, there are a couple of aspects of this
that you have to look at, but if you go back to when those
changes were made and it wasn't documented, the records were
not there to document there was a change, and that was
something that is unacceptable, and the individual who didn't
document that is no longer with the company. I am telling you
that as you do good engineering, you are going to make sure you
understand the requirements of what you are designing, make
sure the part, the subsystem, the system meets those
requirements, and have full documentation.
Mrs. Blackburn. OK. All right, I will yield back.
Mr. Murphy. The gentlelady yields back.
Now recognize Mr. Braley for 5 minutes.
Mr. Braley. Thank you, Mr. Chairman.
Ms. Barra, welcome back. Mr. Valukas, welcome to the
committee.
Ms. Barra, I want to start with some of the comments you
made in your opening remarks. I have a couple of questions I
want to talk to you about.
You mentioned specifically that you had promised that you
would conduct a comprehensive and transparent investigation. Do
you believe that that was accomplished?
Ms. Barra. I think the Valukas report was comprehensive. It
was very far-reaching and we have shared that information.
Mr. Braley. And you also said that you promised you would
share the findings of the report with Congress, our regulators,
NHTSA and the courts.
This is a copy of the report that we received, and it
states on the very front page of the report, privileged and
confidential, protected by attorney-client privilege and as
attorney work product. You indicated that you hired Mr. Valukas
to do this independent investigation, but it is obvious from
the report that you considered this to be an attorney-client
relationship, and the report itself has sections blacked out so
that we, on this panel, don't know who some of the victims were
that are identified in the report. Were you aware of that?
Ms. Barra. Yes.
Mr. Braley. You also indicated that you would engage Mr.
Feinberg to develop a just and timely program for compensating
the families who lost loved ones, and those who had suffered a
serious physical injury, including the families who are
represented here today. There was a recent news report from the
Detroit News which indicated that Mr. Feinberg has confirmed
that the compensation fund will not in any way address people
who weren't killed, people who weren't seriously injured, whose
value of the automobiles they purchased has been diminished
because of all the controversy over these parts that we have
been talking about. Were you aware of that?
Ms. Barra. The compensation program that Mr. Feinberg will
independently administer is for those who lost loved ones or
those who suffered seriously physical injury. The issue of the
value of the vehicle is in front of the courts.
Mr. Braley. And that will not be addressed by Mr. Feinberg?
Ms. Barra. That is correct.
Mr. Braley. Now, one of the things that we know is that
this year alone, GM has issued an astonishing 44 recalls,
covering 17.7 million vehicles in the U.S., and more than 20
million worldwide. How many of those recalls, to your
knowledge, relate to problems that were known to someone in GM
before the bankruptcy sale order of July 2009?
Ms. Barra. At the senior level of the company, none, or the
action would have been taken.
Mr. Braley. So it is your testimony that none of those are
covered.
Ms. Barra. I am not sure what you just said.
Mr. Braley. You are saying here today that none of the
recalls that have been initiated this year relate to problems
known to someone at GM before the bankruptcy sale order in July
of 2009.
Ms. Barra. What I said was the senior leadership had no
knowledge of those issues----
Mr. Braley. And that is not my question. You did a very
exhaustive investigation into the cultural problems at GM.
Ms. Barra. Yes, we did.
Mr. Braley. My question is, as part of that investigation,
did you identify anyone working at GM who had knowledge
relating to those product recalls that covered products
affected by that bankruptcy discharge order in July of 2009?
Ms. Barra. Again, if there was a known safety issue, there
would have been a recall done.
Mr. Braley. Did you attempt to determine that?
Ms. Barra. I was not involved in that process so I can't
comment.
Mr. Braley. Isn't it possible that that discharge order
contributed to GM's lax approach to safety defects on cars
built by the old GM?
Ms. Barra. Absolutely not.
Mr. Braley. Well, we have talked a lot about this culture
of irresponsibility at GM. You have testified about it. It is
covered in Mr. Valukas' report. How can you say absolutely not
when you haven't even focused on that issue?
Ms. Barra. Evidence of that is there were many recalls that
were conducted during that period of time, but I would say now
with--we have re-doubled our efforts, and we have gone back
even more exhaustively than looking at data from TREAD, data
from customer feedback, and we are now even--with the product
integrity organization, it is already accomplishing its task of
going and looking at how the vehicle performs to a higher
level, to ensure we have the safest vehicles.
Mr. Braley. Mr. Valukas, you focused on this culture at GM
in your report. You weren't here the first time when I showed
Ms. Barra the screwdriver that was handed out by General Motors
in the '70s and '80s as a promotional item, and it says safety
comes first at GM on this screwdriver. As part of your
investigation into the history and culture of GM, did you look
back at to whether the old GM had made safety a priority the
same way that Ms. Barra says the new GM is committed to it here
today, and aren't there institutional problems that are much
far-reaching--much more far-reaching than simply firing 15
employees?
Mr. Valukas. Congressman, good question. We looked back and
solicited from everybody that we interviewed information about
whether something they--something in the culture caused them to
do something differently than they otherwise would have done,
or whether safety became a secondary issue. Almost uniformly,
people would say to us safety was the top priority, but we
identified in this report all of the instances of which we were
aware relating to this matter where people took a different
position, so it is there. And I would not ascribe to everybody
the conduct of the people involved here, but I do say that
culture had something to do with the reason why this recall
took so long.
Mr. Braley. My time is up. Thank you----
Mr. Valukas. Thank you.
Mr. Braley [continuing]. For your testimony.
Ms. Murphy. Thank you.
Now recognize Mr. Barton of Texas for 5 minutes.
Mr. Barton. Thank you, Mr. Chairman. Ms. Barra, we are glad
to have you back, and Mr. Valukas, we are glad to have you
before us.
Our opportunity or responsibility on the committee is to
provide for the general welfare, and in doing that, get the
facts on the table so that people can have faith that the
products that your company produces are safe. And, of course,
your requirement is to make sure that you do produce a safe
product that hopefully results in a profit for the company and
the stockholder, but we are both on the same side. We both want
products that are safe, and let the public be aware of the
capabilities, but also the shortfalls.
I am going to ask most of my questions to Mr. Valukas,
simply because we didn't have your report last time, but I will
have one or two questions for Ms. Barra at the end of my time.
I want to focus on the fact that the part number was not
changed back in April of 2006. A GM engineer did approve
changes to the ignition switch, but did not change the part
number. And, Mr. Valukas, in your report, you observed that the
decision to not change the part number was not properly vetted
or scrutinized. You note that a Mr. DeGiorgio did not recall
why he did not change the part number. Is that correct, is that
what your report says?
Mr. Valukas. Mr. DeGiorgio told us that he did not change
the part number, and that as he looked back at it, that he
reflected that he should have changed the part number.
Mr. Barton. OK. And apparently, and obviously, that is very
important because you have a part number change, then that
creates a paper trail, there was some sort of a problem that
had to be corrected, and if you are doing an investigation, you
can compare, and from that time forward, see if the problem was
fixed.
Now, I want to direct your attention to that big binder
that we have right between you and Ms. Barra, and on tab 35----
Ms. Valukas. Thirty-five?
Mr. Barton. Yes, sir, 3-5.
Mr. Valukas. Give me a moment.
Mr. Barton. There is an April 5 chain of e-mails between
this Mr. DeGiorgio and the engineers at the switch supplier,
Delphi, and some other GM employees. Attached to that exchange
is a spreadsheet of upcoming changes to the Delta ignition
switch. Can you locate that?
Mr. Valukas. I think I have it, yes.
Mr. Barton. OK. Now, it is interesting to me that these OK,
the subject is not anything that is safety-related. The subject
matter is Delta ignition switch changes, tooling tweaks,
increased process capability. And then in the e-mail it talks
about this is a black box design, and they want to change the
part to increase the process capability. This will improve the
fallout rate at the Delphi Condura plant.
Well, first of all, what is a fallout rate?
Mr. Valukas. I presume it is the rate in which something
fails.
Mr. Barton. OK. So if you improve the fallout rate, that
means you are going to decrease the number of failures. Is it
important, in your mind, that since they talk about a black
box, apparently, anything within the black box they don't have
to be too worried about it as long as everything in the black
box works as specified, because there, apparently, in
retrospect, is quite a bit of commentary about, well, we didn't
really pay much attention because it was all within the black
box.
Mr. Valukas. Well, that is the commentary, but the general
rules are to change fit, form or function, whether it is in the
black box or otherwise, the part number ought to change. And in
this situation, particular to this aspect of it which is
increasing the torque, that would fall within one of those 3
categories. And I think you can find an explanation, black box,
but even Mr. DeGiorgio in his interview with us conceded that
this was a change in fit, form and function, and would have
required a change in the part number. And the consequences were
devastating over the years. This was not the only time. That
issue came up four times, as you properly note, where people
came back to him and said did something change, and he said no,
and that is one of the reasons why this took a decade.
Mr. Barton. Well, do you think that this particular e-mail
exchange, they knew they had a safety problem and they are
couching their phraseology differently to hide it, because they
don't really talk about a torque issue or anything, they are
talking about a fallout rate and--within the black box. Do you
think this was intentional or----
Mr. Valukas. No.
Mr. Barton. You don't.
Mr. Valukas. I don't. Let me put it this way. We have not
been given access to the Delphi witnesses. We have not been
permitted to interview them, and our receipt of documents has
been limited from them. On the GM side of the process, the
answer to that question is no.
Mr. Barton. OK. And, Ms. Barra, In the time that I don't
have anymore, my question to you, Mrs. Blackburn tried to
elucidate an answer from you about a change in culture, and the
fact that, even where they are making these specification
changes, that they didn't meet the specification as, wasn't
that a problem and shouldn't you make sure that everything
meets your specifications. And your answer was, well, if the
overall system works, it is OK. Now, to me, that doesn't
represent a cultural change. And I have talked to the General
Motors, the engineers and management team in my district down
in Arlington, and they are vocally insistent that they are not
going to use any part in their plant that doesn't meet the
specification and operate just as it is supposed to.
Ms. Barra. I totally agree with you. A part needs to
operate just as it is supposed to, and there has been
significant change. First of all, everything that is done, it
is documented, it has gone through a validation process, it has
also gone through a systems integration, so it is much more
rigorous. And knowing that the part is good, and that the
system is going to act, or the vehicle is going to perform
safely and with quality. And as it relates to making a part
change, absolutely acceptable. I ran an assembly plant and I
totally agree with the people that you have talked to at the
Arlington plant. If you do not have a documented part number
you shouldn't be changing parts. So their answer is absolutely
correct, and I appreciate the fact that they are committed to
do that.
Mr. Barton. Thank you, Mr. Chairman.
Mr. Murphy. Thank you. The gentleman's time has expired.
Recognize Mr. Butterfield for 5 minutes.
Mr. Butterfield. Thank you very much, Mr. Chairman. You
know, Mr. Chairman, it is an unspeakable tragedy that so many
families have suffered as a result of these shortcomings of
General Motors, and some of these families are with us today.
And as feeble as it may be, I simply want to offer my
condolences to the families who have been affected.
Let me start with you, Ms. Barra. Is it Barra or Barra?
Ms. Barra. It is Barra.
Mr. Butterfield. OK. We have had a little debate about that
back here, but, Ms. Barra, Mr. Boyer, who is on the public
record as stating that the company has hired 40 new defect
investigators. How many of these individuals will be new to the
company?
Ms. Barra. I can't speak specifically, but I can tell you
that I believe most of them came from within the company,
they--but they came, and I know how the selection process was,
and they were some of our very best engineers across the
company, so they knew a broad--together, collectively, they
knew a broad array of parts and systems in the vehicle.
Mr. Butterfield. Well, our information----
Ms. Barra. They were handpicked.
Mr. Butterfield. Our information and in acting with your
company suggests that all 40 of these new individuals would be
promoted from within the company. Do you dispute that?
Ms. Barra. As I said, I believe--I knew the lion's share--I
can't tell you if one or two came from outside. I know we did
an exhaustive search inside to get some of the best and most
experienced engineers into this role.
Mr. Butterfield. Well, I think you have heard the theme
throughout this committee today on both sides of the aisle that
we are talking about a new culture within the company----
Ms. Barra. Yes.
Mr. Butterfield [continuing]. And I would strongly suggest
that you look at bringing in some outside fresh blood to run
that part of the company.
How many vehicles has General Motors recalled since the
Cobalt recall began in February? I have heard 40 million, but I
know that is over a period of years, but how many actually have
been recalled since February of this year?
Ms. Barra. I have to add up the count. I don't know if we
have that information.
Mr. Butterfield. Hundreds of thousands?
Ms. Barra. It is several millions. In the tens of millions.
Mr. Butterfield. And let me ask you this. How are vehicle
owners informed by GM about these recalls? Do you e-mail them,
do you mail them, how do you do it?
Ms. Barra. Well, first of all, we follow what the
regulations are, the NHTSA process. So we send a letter, but we
have gone above and beyond that. We have sent additional
letters in addition to the ones that are required as part of
the NHTSA process. We have also gone out on social media, we
have also hired more than 100 people to work in our customer
engagement centers to call and reach out to these individuals.
We also know dealers who have been great partners in this,
have, in many cases, gone out and contacted or received calls
and explained the situation.
Mr. Butterfield. So you go beyond. You go beyond----
Ms. Barra. We have gone well beyond----
Mr. Butterfield [continuing]. Just sending a letter to the
address of record?
Ms. Barra. Absolutely.
Mr. Butterfield. That is reassuring. When you communicate
with vehicle owners, are they informed of the seriousness of
these safety hazards posed by the ignition switch?
Ms. Barra. Yes, in fact, very specifically in the letter it
states that to operate the vehicle safely, that you need to
have the key or just the key in the ring, and take everything
off your key ring. We have also to these individuals, as you
know, made, if they are still uncomfortable, although we have
demonstrated and NHTSA has reviewed and said it is safe to
operate the vehicles this way, again, with the key or the ring,
if the individual still is uncomfortable, because we are
customer-focused, we are putting these individuals into loaner
or rental vehicles.
Mr. Butterfield. And what percentage of the people who were
notified actually bring the cars back into the dealer?
Ms. Barra. Well, in general, we are in the 80s, and I have
been told we are one of the highest of how we complete recalls,
but in this case, we are still working through it.
Mr. Butterfield. And once there, how long does it take to
get it fixed?
Ms. Barra. It is a matter of an hour or so.
Mr. Butterfield. Just a couple of hours, it can----
Ms. Barra. Right.
Mr. Butterfield [continuing]. It can get done. It seems
like there is a large volume of recalls, according to your
testimony, and I am more concerned about how safely and timely
can these corrections be made. I mean----
Ms. Barra. Well, we have----
Mr. Butterfield. With the large volume that----
Ms. Barra. Yes.
Mr. Butterfield [continuing]. You are talking about.
Ms. Barra. Right.
Mr. Butterfield. You are talking about millions of cars.
Ms. Barra. Right, but if you look at----
Mr. Butterfield. Yes.
Ms. Barra [continuing]. In some cases it is replacing a
part, in some cases it is as simple as making sure a connection
was made. In other cases, for instance, in some of our
crossover vehicles, over time a crimp of an electrical
connection where it is simply going back and re-crimping and
soldering that. We have been exhaustive, and I know it sounds
like a large number of vehicles, it is, but we want to do the
right thing for our customers. To my knowledge, this is the
most expansive, comprehensive review we have done, because in
some cases we are acting on vehicles where there is no TREAD
data even to support there is an issue, but as we went in and
looked at the subsystem performance, we wanted to make sure we
were acting safely.
Mr. Butterfield. One dealer can do dozens in a single day?
Ms. Barra. I am sorry?
Mr. Butterfield. One dealer, one large dealer, could do
dozens in a single day.
Ms. Barra. Dozens. Actually, we have dealers that are
extending their hours and their service department to be
responsive to customers to get these repairs made.
Mr. Butterfield. Finally, is GM currently investigating
ignition systems of any other product lines which have not been
recalled to date?
Ms. Barra. We will continue, as I said, we plan to be
substantially complete by the end of this month with the
additional people we have put in, but we are going to continue
until we are confident that if there are any issues on our
vehicles, whether it is a different safety system or ignition
switch, that we have reviewed it.
Mr. Butterfield. Thank you. Mr. Valukas, we live by the
clock up here, I am sorry.
Mr. Murphy. Thank you.
Mr. Butterfield. We will get you next time.
Ms. Murphy. Now recognize Dr. Burgess for 5 minutes.
Mr. Burgess. Thank you, Mr. Chairman. And, Ms. Barra, if we
could just continue on that line of questioning that Mr.
Butterfield was pursuing. How are your dealers, how are they
holding up under what must be a massive onslaught of people
needing their cars fixed?
Ms. Barra. Our dealers are doing a tremendous job of
supporting the customer. As I said, we have many dealers who
are reaching out. We have had dealers who had a customer that
was several miles away, for instance, there was one who they
were concerned because their daughter had the vehicle and there
wasn't a dealership close by. The dealer went back and forth
and got the vehicle, got the repair made, and gave a loaner. So
I can't be more proud of how our dealers are supporting the
customer.
Mr. Burgess. But yet, you have millions of cars that need
to get in and be attended to. Pretty hard to provide a loaner
car for that population.
Ms. Barra. Well, first of all, most dealers for a simple
repair have loaner programs. It depends on the dealer and the
issue, but on specifically the Cobalt and that population of
vehicles, we are providing loaners or rentals, and we have
worked with rental companies to make sure they have enough
vehicles to do that, but again, in many of these cases, even
though the vehicle is recall, it is a very simple visual
inspection to know if the vehicle is OK or not, and the dealers
are very equipped to do that with their service technicians.
Mr. Burgess. And I just recall being on this committee when
we went through this with Toyota back in 2009, the Toyota
dealership in the district that I represent had extended hours,
would stay open until late at night to accommodate people who
otherwise were working and couldn't get in. And you feel that
that is the case currently with the GM dealers?
Ms. Barra. I absolutely do. I have spoken to hundreds of
dealers, and I know our North America president, Alan Batey,
has also--we have regular communications----
Mr. Burgess. But----
Ms. Barra [continuing]. As they share with----
Mr. Burgess [continuing]. Let me interrupt just because my
time is going to run out. How are you doing--what seems to be
the chokepoint in this? Is it getting the part to the dealer?
Ms. Barra. Actually, we have produced and shipped over
400,000 parts. The challenge is getting the customer to come in
and get the vehicle repaired, and that is why we have employed
a lot of innovative ways to do that, and that is why the
dealers are reaching out.
Mr. Burgess. And yet, in a story in the New York Times
either yesterday or today, people talk about receiving multiple
postcards, you have to come in and get your car fixed, and they
say I have tried but they don't have the part available for me.
Are we going to start hearing less and less of those stories?
Ms. Barra. I think we should because we start another line
within a week, so we are continuing to ramp up, but right now,
we do have the parts, but we have tried to be incredibly fair
and that--in a first-come-first-serve basis as customers raise
their issues. Some of the postcards that we have sent are
because they are required on a frequency by law, and we are
complying with the law.
Mr. Burgess. Thank you.
Mr. Valukas, let me ask you a couple of questions. And I
think I understood from your introduction that you are a trial
attorney, is that correct?
Mr. Valukas. I am.
Mr. Burgess. I mean I have to tell you, at some point, were
you just pulling your hair out over some of these things that--
as your investigation churned through this information? Let me
specifically--you have the binder in front of you. I don't
have--mine is not divided up into tabs, but page 119----
Mr. Valukas. Of the report?
Mr. Burgess. In your report.
Mr. Valukas. Thank you.
Mr. Burgess. Here is a paragraph, witnesses have
inconsistent recollection as to whether the product
investigations group became involved in the Cobalt airbag non-
deployment issues at this stage. Everest reports that in April
'07, the FDA group transitioned the Cobalt airbag matter to the
PI Group where it was taken on by an engineer named Eric
Buddrius. Documents in Buddrius' file indicate he was working
on the issue, and a May 4, 2007, investigation status review
presentation planning worksheet states that he was scheduled to
present on an issue described as Cobalt airbag discussion item.
Buddrius had no recollection of the involvement. I mean they
were right up to the point where they had an answer, and now
this guy doesn't even remember working on it. Was that pretty
frustrating from a trial lawyer's perspective?
Mr. Valukas. One of the key problems we found is the lack
of documentation, which led to lack of accountability. And I
think a classic example of that was what happened in 2005, when
we went back to find out why did they close the investigation
into the Cobalt issue, and we found ourselves in a position
where there were no notes with regard to the matter, everybody
at the meeting pointed to somebody else in the meeting has
having responsibility for having closed the matter, but we
could not ascertain who actually had that responsibility, or
what were the circumstances which caused the closure to take
place.
Mr. Burgess. All right.
Mr. Valukas. And that lack of accountability is reflected
in so many of those areas. When we went back, we were dealing
in many instances with no documents.
Mr. Burgess. Well, let me just ask you, because I am going
to run out of time. The 15 individuals have been terminated by
General Motors, is that correct, but we can't know those 15--as
we read through this report, we can't know the names of those
15 individuals because of employee privacy concerns, is that
correct?
Ms. Barra. It has been submitted to the committee.
Mr. Burgess. It has been submitted to the committee?
Ms. Barra. It has been--but we have asked that it be
confidential to respect the----
Mr. Burgess. All right----
Ms. Barra [continuing]. Privacy.
Mr. Burgess [continuing]. Thank you for that. Can you just
tell us what was the basis for termination, because I go
through this, it looks like a lot more than 15 people should
have been terminated.
Ms. Barra. Yes, and there was a senior group of my leaders
that we looked, we read the report, and we were very thorough
in looking at those who we believed didn't take the actions
they should, and then those who simply didn't move with a sense
of urgency. The people closest to us over a repeated period of
time are those who are no longer with the company.
Mr. Murphy. Thank you.
Mr. Burgess. Thank you.
Mr. Murphy. All right. Now recognize Mr. Green for 5
minutes.
Mr. Green. Thank you, Mr. Chairman, and thank you for doing
the follow-up hearing.
Ms. Barra, you said that you had shipped 400,000 parts. Was
that for the ignition issue?
Ms. Barra. Yes, I was specifically referring----
Ms. Green. How many----
Ms. Barra [continuing]. To the ignitions----
Mr. Green. How many do you estimate were recalled or the
need--how many were recalled, because I keep hearing 16
million, but I know there are other----
Ms. Barra. OK.
Mr. Green [continuing]. Issues.
Ms. Barra. Of the specific ignition switch cylinder,
because it is a kit now that we put together, the total number
of vehicles produced globally was over 2.6 million. Now, we
know not all of those are still in service today, and we have
built kits to service the 2.6 population. We are already over
400,000. We will be complete by August 4--or, excuse me,
October 4.
Mr. Green. OK. You have been vocal about GM's effort to
change its corporate culture, which you describe in our last
hearing in April as a cost culture. Mr. Valukas, can you
describe some of the problems you saw with the corporate
culture in your report, talk about the GM nod and the GM
salute. What do these refer to?
Mr. Valukas. Well, let me be specific on that. The GM--
without using those phrases, you had a situation where it took
a plaintiff's lawyer to do the simple thing of comparing two
switches; one from 2006 with one from 2009, to find out that GM
had manufactured two separate switches. No one goes back to
revisit previously-made decisions, so they are stuck in if it
is the decision we have made, we don't go back and revisit and
look to see if there is something else. We have a situation
where you had silos, you had people within GM who had certain
levels of information that was not shared with other
individuals, and so when the other individuals found that
information, for instance, the Indiana report, Officer Young's
report, that information was ultimately supplied by third
parties outside of GM. GM did not know that they had that
information within their own files, at least some of that
information, on files and some of it was in public records. You
had circumstances where, among other things, you have a
sensitivity to the use of the word stalls, which might have
created for someone the impression that maybe we stay away from
using words which will force people to ask hard questions,
rather than taking an approach in which you ask the hard
questions and----
Mr. Green. OK. OK.
Mr. Valukas [continuing]. Take whatever those answers are.
So we found instances of that which had a significant impact
on--at least in terms of the finding information, impact on how
the investigation of the Cobalt switch----
Mr. Green. Well, it sounds like the old GM's culture was
mostly let us not talk about a problem. Is that what it is,
without notes, and I understand we are both lawyers, you may
say, well, I don't want to take notes because somebody can
subpoena them, so GM just put them under the rug and now it is
coming home to roost.
Ms. Barra, in our last hearing, you referred to the new GM
in your responses to you questions, the culture would change
under your leadership. You testified that GM created a new vice
president of global vehicle safety, it was filled by Jeff
Boyer, and I know you have been with GM a number of years, and
Mr. Boyer has been with GM?
Ms. Barra. Yes, he has been----
Mr. Green. And so you all both worked for the old GM. Can
you tell me what is going to be different in the new GM, even
though everybody in the 40 inspectors that Congressman
Butterfield talked about, are GM. You need a culture change and
not just verbiage.
Ms. Barra. I completely agree with you, so it will be the
actions we take, the actions we are taking, but I can also tell
you that the men and women of General Motors, the vast majority
come to work every day and they want to do a good job. They
heard me talk about this report. They are as deeply troubled as
I am, and they are taking action, and we are creating a
culture. I have evidence of it every day where employees are
coming forward, they want to do the right thing, they want to
produce high quality safe vehicles.
Mr. Green. Well, and I only have a minute, and I agree, but
that needs to continue because I also know how it works on the
shop floor, that, oh, don't talk about that, just do your job,
and that is what got GM into this position.
Your company set up a compensation fund for victims of this
fault, in recognizing that no amount of money can replace a
loved one or can compensate for someone who is terribly
injured, how would that fund be administered, and what in the
mere total do you expect to compensate the victims with? Have
you announced a total for that?
Ms. Barra. We haven't announced a total. Again, it is being
run by Ken Feinberg, who is known as an expert in this area. He
will have complete----
Mr. Green. I am familiar with Mr. Feinberg from the----
Ms. Barra. He will----
Mr. Green [continuing]. BP.
Ms. Barra [continuing]. Have complete independence, but I
think it is important to note that General Motors wants to
reach with this compensation program everyone who lost a loved
one due to this issue, or suffered serious physical injury, and
that is what we have communicated to Mr. Feinberg.
Mr. Green. Well, I am out of time, but there are a whole
lot of GM customers out there who are frustrated because over
the decade have been loyal, but now we are seeing the 16
million recalls. There is a problem, and I hope you will have
it fixed.
But, Mr. Chairman, I would hope we would continue this to
make sure it is fixed.
And I yield back my time.
Mr. Murphy. Gentleman yields back.
I now recognize Dr. Gingrey for 5 minutes.
Mr. Gingrey. Ms. Barra, I want to ask you a question about
the situation in the Cobalt. If one of my two, or twin, 16-
year-old granddaughters driving in the Cobalt and inadvertently
the ignition turns to the accessory position, if they, who just
got their driver's license 3 months ago, I would think that
their initial reaction would be to try to turn the car back on,
start the car back again, although it is in drive and it is not
in neutral, would the car start back up?
Ms. Barra. Well, first of all, if they were driving the
vehicle and they had just the key in the ring, this condition
shouldn't happen.
Mr. Gingrey. No, but if it did happen.
Ms. Barra. So----
Mr. Gingrey. Let us assume that it did happen.
Ms. Barra. OK, so then you have to restart the car. I
guess----
Mr. Gingrey. I think the answer is----
Ms. Barra [continuing]. You would have to go----
Mr. Gingrey. You would have to put it in neutral----
Ms. Barra. Put it in neutral or park, right.
Dr. Gingrey [continuing]. Before it would start. And that
would be pretty hard for a 16-year-old, inexperienced driver to
even think of, with an 18-wheeler bearing down on them. And as
I listen and the other hearing that you were at several weeks
ago, General Motors has got to have the best engineers in the
world, whether they are electrical engineers or mechanical
engineers, probably both. How in the world would they not know
that when the vehicle, when the ignition inadvertently, because
of the low torque, and it shifts to the accessory position, the
engine stalls, that that would also deactivate the airbags? I
would think that that kind of testing is done to a fare-thee-
well before a vehicle is approved for sale. I mean, well, how
could they not know that?
Ms. Barra. I can't speculate on why they didn't know. What
I can tell you is any time a vehicle stalls now, we consider it
to be a safety issue, and if we find that there is a
malfunction in a part or a defect in a part that causes the
stall to occur, we are going to----
Mr. Gingrey. Well, I would say a safety issue indeed if a
side airbag would not inflate if somebody got T-boned in the
middle of an intersection when this happened, and a young
person, even an experienced driver of 40 years, is not going to
think that quickly.
Mr. Valukas, and I think you alluded to this a few minutes
ago, if not for the Brooke Melton lawsuit, and Brooke's--I
can't see the back of the room but her picture may be up there
on the wall. She is in my district in Paulding County, Georgia,
11th Congressional District of Georgia. If not for the Brooke
Melton lawsuit, and she was killed, and the fact that her
lawyers figured out that the ignition switch part from model
year 2008 was different from model years 2005, '06 and '07, in
the Cobalt, would we even know about this ignition switch
problem today? Would we even be aware of it?
Mr. Valukas. The answer is yes, because there was an open
and, at that point, significant investigation going on at that
particular point, and certainly, there was information and
evidence that was accumulating as they were going forward,
pointing to the fact that they had these non-deployments,
pointing to the fact they had fatalities, and pointing to the
fact----
Mr. Gingrey. Well----
Mr. Valukas [continuing]. That the switch had something to
do with it.
Mr. Gingrey. Well, that smacks----
Mr. Valukas. I mean----
Mr. Gingrey. That smacks of a big cover-up to me. And after
General Motors learned of this change, it took months for GM
outside experts to confirm that there had been a change. Why
did this take so long?
Mr. Valukas. I don't have a good answer for that. I can
tell you it did take that long. I can tell you that from the
time of April of 2013, when that deposition took place, they
knew or should have known at that--or they knew at that point
that they had two different switches, and they gave it to Mr.
Mellady, the expert, and he came back with his confirmation of
what they were given in the way of information in April, and
that took until almost October.
Mr. Gingrey. Yes, it is amazing, and that when the issue
was presented to decisionmakers in December, no recall was
announced. It took another month and a half before GM finally
decided to recall the Cobalt.
What information was missing in December that prevented GM
from issuing a recall at that time? Ms. Barra, can you tell me?
Ms. Barra. I can't talk about the specific information. I
think we do know that not all the information was presented at
that meeting. I would say when the right information was in
front of that group, they did make the right decision, but I
would also say, and I have said publically----
Mr. Gingrey. Well, let me just say in my concluding 35
seconds, this whole sequence, this whole sequence, from the
time the company learned of a potential difference in the parts
during the Melton litigation, to the time the recalls were
announced, took 10 months. Ms. Barra, why the foot-drag? Is
this typical of GM's investigations into a product concern, and
how do you intend to change this?
Ms. Barra. Well, we already have with the way we are
working through recalls today. We have changed that process. It
is expedited, and the most senior levels of the company are
involved in it, and I think, again, although I don't want to do
recalls, we are going to do what is right for our customers,
and we are demonstrating it today.
Mr. Gingrey. Thank you. And I yield back.
Mr. Murphy. I should ask a clarifying question because the
doctor referred to it, and a number of Members have asked with
regard to the word cover-up. Can you define what cover-up
means, Mr. Valukas?
Mr. Valukas. In this instance, what we looked for was any
evidence that individuals knew that they had a safety issue,
and took steps to conceal the fact that they had a safety
issue. That is what we were looking for in terms of cover-up.
And then we interviewed individuals, we asked them questions to
gather the facts to see whether, in fact, that had taken place,
and we sought to test those facts against the documents that we
were reviewing. So if someone knew something on a given day, we
identified that and we took steps to see whether they concealed
what they knew from other individuals. We did not find that.
That is what I am talking about.
Mr. Murphy. Does your definition also include if people
slow-walked moving on safety issues----
Mr. Valukas. If it was a----
Mr. Murphy [continuing]. Is that also a cover-up?
Mr. Valukas. If it was a--pardon me, I don't mean to
interrupt.
Mr. Murphy. That is OK.
Mr. Valukas. If it was deliberately done, then it would
encompass something like that. If it was a matter of someone
being in a position, for instance, when one of the
investigators was given the assignment, he was given no
deadline, he was given no sense of urgency, so he put it into
the queue with other investigation and it took its time. That I
would not call a cover-up, I would call that something other
than that.
Mr. Murphy. Thank you.
All right, Mr. Yarmuth, you are recognized for 5 minutes.
Mr. Yarmuth. Thank you, Mr. Chairman.
Ms. Barra, welcome back to the committee. When you were
here on April 1, I told you that a member of my staff had had a
Chevrolet Malibu that was subject to a recall. She found that
out by going on the Web site, not through any personal
notification. And she inquired of the dealership, how she
should proceed and they said there is no fix, and I presented
you with that dilemma and you said at the time there is a fix,
whether it is a check or a replacement of the product, but that
fix does exist for that specific vehicle. Well, I have here the
important safety recall that she just received on Monday, so
that is 2 \1/2\ months after you appeared here on April 1,
notifying her of the recall, saying that her vehicle may
experience a sudden loss of power steering assist, and then
other language, which could result in an increased risk of a
crash, and also informed her that the part doesn't exist yet to
fix the product.
So when you consider that situation, a different vehicle,
different problem, with the ignition problem that we have
focused on, and you have already said that many of these
vehicles will not be fixed, the ignition problem, until
October, those parts won't be available, what are consumers
supposed to do when they are going a period of up to 6 months
or longer without any way to fix their vehicle? How can they
assess the risk? I don't know what my staffer should do. There
is no--I mean I see all the pharmaceutical products, the long
list of possible side-effects, and you have to calculate the
risk, but would you advise or would you let your son or
daughter drive these vehicles now with the level of risk that
you may know more about than we do?
Ms. Barra. Well, on the Cobalt specifically, we have done
extensive testing on driving the vehicle with the key or the
key in the ring, and it has validated that it is safe. We have
also reviewed that with the technical experts at NHTSA and they
have concurred. So, in that case, those vehicles are
demonstrated safe to drive.
Just in general, if people have concerns, they can go to
their dealer or they can call our customer engagement center
and we walk them through the specifics of their specific issue,
because, again, in many of the recalls that we have done, it is
not a part replace, it is a visual check, and depending on what
happens, it would be what needs to be repaired. So each
individual recall has a slightly different look and feel to it.
Mr. Yarmuth. So I know you have talked about the
possibility of loaner vehicles and rental cars and so forth,
but--and I understand the difficulty with a supplier gearing up
to produce a part that they may not have made in 4 or 5 years,
and they have to all of a sudden come up with several million
of them. We have a part manufacturer in Kentucky in my district
that services Peterbilt trucks, and I have been to theirs and I
know how much work they have to do, but again, is there any
reliable alternative to these consumers who, again, face a very
important decision as to whether--I mean I don't know what the
risk--of whether NHTSA has assessed the risk with regard to
power steering assist, whether that is significant or not, but
there are a lot of consumers out there, I am sure, who are
wondering whether they should be driving or not.
Ms. Barra. Again, I would encourage them to call our
customer engagement center or talk to the dealer, and we can
talk about the specific situation.
Mr. Yarmuth. OK. I have no other questions.
Ms. DeGette. The gentleman----
Mr. Yarmuth. Yes, I am sorry, yield to the ranking member.
Ms. DeGette. I just wanted to ask you a question, Ms.
Barra, since there is a little time here.
So you had testified that out of the roughly 2.6 million of
these cars that were recalled, you guys have sent 400,000 parts
out to your dealers, is that right?
Ms. Barra. Produced and shipped.
Ms. DeGette. I am sorry?
Ms. Barra. Yes
Ms. DeGette. Yes, roughly. And as of Monday, it looks like
about only 177,000 of these vehicles have been repaired. And
you had testified a little bit earlier--so that is 177,000
vehicles out of 2.6 million vehicles. And we have talked about
this before. This is one of our big concerns in this committee,
is how do we get those folks to take in those recalled vehicles
to be repaired, and you said you are looking at some innovative
ways to do that. I am wondering if you could just take a few
seconds to talk about how GM is trying to get those people to
take those cars in.
Ms. Barra. Well, we are doing a lot on social media, and we
are looking at the populations especially, some of these
vehicles are older vehicles, so we have done actual research to
figure out what messages would be most compelling to have these
individuals come in to get their vehicles fixed. I would also
say we are, the dealers are working to do specific arrangements
with each individual to make it as inconvenient or to----
Ms. DeGette. As convenient.
Ms. Barra. As convenient as possible, to reduce the
inconvenience. And so there are a number of steps. You know,
right now, we are in a----
Ms. DeGette. Or let me ask you because we are----
Mr. Murphy. No, we are----
Ms. DeGette [continuing]. Can you meet the October 4 NHTSA
deadline?
Ms. Barra. We are on track. I have talked to the CEOs of
the companies making these parts, and we monitor it on a daily
basis.
Ms. DeGette. OK.
Mr. Murphy. All right, thank you.
OK, Mr. Olson, 5 minutes.
Mr. Olson. I thank the chair. And welcome, Ms. Barra, and,
Mr. Valukas.
I approach issues like these from the perspective as a
Naval officer and a pilot. Leaders in The Navy are called
skippers. Good skippers give credit for others who do good.
When good things happen in a squadron, they give credit to
others. Bad skippers take all--I'm sorry. Good skippers give
the credit and take all the blame. By that definition, Ms.
Barra, you are a decent skipper, but people have died because
of GM's defective product.
As we knew, and Mr. Valukas' report shows clearly, those
deaths occurred because our ship, GM, had some problems that
can't be fixed overnight. As GM's skipper, the burden to fix
these problems is upon you, ma'am. Squarely upon you, and I
think you know that. GM has to rebuild its trust with the
American people, and part of that trust is being
straightforward on the number of deaths that have occurred
because of these defective Cobalts.
You have testified that 13 deaths occurred because of these
cars, is that right, ma'am?
Ms. Barra. I have testified that with the information we
have----
Mr. Olson. OK.
Ms. Barra [continuing]. We believe that the ignition switch
may have been related to 13, but I don't have all the
information.
Mr. Olson. OK, because that is a problem because on the
wall behind you, there are 15 photographs of tragedy and loss
from Cobalt vehicles.
Ms. Barra. And that is why we are doing the compensation
program. It will be independently administered by Mr. Feinberg,
and I can assure you that I and General Motors want to make
sure that anybody who was harmed as a result of the ignition
switch defect is a part of that program.
Mr. Olson. I will get to that compensation fund later.
How about injuries? Any number of injuries you think that
has been caused by defective Cobalt--injuries, not deaths but
injuries? What is the number? Any idea, ballpark?
Ms. Barra. Again, I don't have the specific number in front
of me, but we don't have a complete number because we only have
the information that is available to us, but again, that is why
Mr. Feinberg, who is an expert in doing this, and we want to
have everybody who had suffered serious physical injury or
suffered the loss of a loved one, we want everyone to be a part
of this program.
Mr. Olson. And thank you very much, Mr. Feinberg because,
as you know, restoring the trust of the American people, part
of that is having a viable, robust compensation program for the
victims' families. And I know you have tasked Mr. Feinberg, as
you have mentioned, to evaluate options for the compensation
trust fund, my question is, from your opening statements, it
sounds like GM has not put any limits on Mr. Feinberg. Is that
true? No limits on the compensation? What is--he has got all
options out there to determine the compensation trust fund?
Ms. Barra. I didn't hear the beginning of your question, I
am sorry.
Mr. Olson. The question is, you have tasked Mr. Feinberg to
have this compensation fund, are there any limits upon him
because he is out there doing whatever he wants to do. I mean
what are----
Ms. Barra. He is independent, and he will determine those
who qualify that meet his protocol and the appropriate amounts.
Mr. Olson. Will your Board have oversight--have to approve
his recommendations or----
Ms. Barra. No.
Mr. Olson [continuing]. Just--no, so he is----
Ms. Barra. He is----
Mr. Olson [continuing]. An independent operator.
Ms. Barra. He is independent.
Mr. Olson. Have families that have previously reached
settlements with GM, will they be eligible for this trust fund?
Ms. Barra. They are eligible to apply.
Mr. Olson. How about the families whose claims were before
GM's bankruptcy, they----
Ms. Barra. Eligible to apply.
Mr. Olson. They are eligible as well. How much do you
expect the fund to be? Any ballpark?
Ms. Barra. Without knowing the protocol, I can't speculate
on that. By the time Mr. Feinberg shares with us his protocol,
then we will have to take an appropriate estimate, but we
really won't know until the program has been fully
administered, and we have indicated that we will share the
number of incidents and also the total.
Mr. Olson. Is there a chance the fund will be capped, a
limit?
Ms. Barra. No.
Mr. Olson. No chance. OK, I yield back. Thank you, sir.
Mr. Burgess. Will the gentleman yield?
Mr. Olson. I will.
Mr. Burgess. Let me just ask you, Ms. Barra, along the
lines of do people know how to get in touch with you if they
are having trouble getting their car fixed?
Ms. Barra. Again, in the letters that we sent, and we send
to the the record, we go to Polk and get registration data, and
that is the best information we have. That is why one of the
things that would be very helpful is to have a national VIN
database. That would be incredibly helpful to make sure we are
reaching them directly. But in the communications that we have
had, there is information on how to contact us as well as their
dealer.
Mr. Burgess. So the message should be, a person should
contact their dealer?
Ms. Barra. Well, they can contact our customer engagement
center. There is also a 1-800 number at the back of their
owner's manual, but then in addition, we know many people will
contact their dealer.
Mr. Burgess. Before this testimony concludes today, could
you provide us with that 800 number?
Ms. Barra. Sure.
Mr. Burgess. A lot of people are watching this hearing, and
I am getting a lot of activity on Twitter, people wanting to
know how to get their cars fixed.
Ms. Barra. Sure.
Mr. Burgess. So you would help us if you did that.
Mr. Murphy. OK.
Mr. Burgess. Thank you.
Mr. Murphy. Thank you.
I now recognize Ms. Castor for 5 minutes.
Ms. Castor. Thank you, Mr. Chairman.
The Valukas report refers to the Board's commitment to
improving the quality of GM's vehicles through a bonus plan for
corporate officers and employees at the executive, director and
supervisor levels, and part of whether the calculation for
whether a bonus would be payable was improvement in the quality
of GM's vehicles.
Mr. Valukas, do you know what improvement in quality means,
or how it is quantified for the purposes of the bonus
calculation?
Mr. Valukas. I can't give you the calculation. I can tell
you that within the quality calculation, it is supposed to be
safety, that the individuals which we interviewed identify
improvement in quality as relating to the safety issues, so
that it would include----
Ms. Castor. So safety is supposed to be a quality----
Mr. Valukas. Absolutely.
Ms. Castor [continuing]. Component, but how is that
quantified?
Mr. Valukas. I don't have an answer for you on that.
Ms. Castor. OK. Ms. Barra, did you receive bonuses through
this bonus program during the last decade while the ignition
switch issues were ongoing with GM?
Ms. Barra. There were many years where there was no bonus
paid, but there are some years where there was. Not all of
those years there was quality, but I can tell you that the
quality components, one aspect of it is, is external surveys in
which safety is an element of that.
Ms. Castor. How many years did you receive those bonuses?
Ms. Barra. I would have to go back and check.
Ms. Castor. OK, so you will provide those to the committee?
Ms. Barra. Sure.
Ms. Castor. Thank you. And, Ms. Barra, will GM's bonus
program be revised to include an explicit safety component?
Ms. Barra. It already has quality that has safety as a
piece of it. I will commit though, I will go back and review to
make sure it is explicit.
Ms. Castor. Because Mr. Valukas just said he reviewed it
and he is not certain how expansive that is, and what really
goes into considerations of safety.
Ms. Barra. I will make sure it is explicit. It is a good
suggestion.
Ms. Castor. OK. Ms. Barra, will GM's compensation structure
for all employees, including those below the leadership levels,
now include a safety component?
Ms. Barra. Again, when you speak of all employees, 220,000
employees, or over 200,000 around the world, and we comply with
the different laws in those compensation programs, but we have
sent a strong signal that quality is important, and that
represents 25 percent across all levels.
Ms. Castor. I would recommend that, as part of your
overhaul for all employees to encourage considerations of
safety, that it is made much more explicit to all of those
employees. In the past, GM has put into place incentives for
high-level employees to make improvements. If GM is serious
about its new focus on safety, there should be stronger
incentives in place for executives and all of the other GM
employees, at the very least, to identify safety problems and
improve the safety of all GM's vehicles.
And now I would like to ask about the adequacy of the
recall. GM has assured the public that the replacement part for
the recalled vehicles will fix the defect; low torque that
causes the ignition switch to turn too easily from the run
position to the off or accessory position. Ms. Barra, I hope
you can assure me that this is the case?
Ms. Barra. It has been validated extensively, and then
NHTSA has as well reviewed it.
Ms. Castor. But here is my concern. There seemed to be two
problems with these vehicles' ignition switches. Issue number
one is that the force required to turn the switch is too low.
And issue number two is that a driver's knee can hit the key or
key fob and inadvertently turn the switch to the off position
because of it is placed too low. The fix to the recall will be
to install a new ignition switch with higher torque, requiring
more force to turn off the switch. Is that correct?
Ms. Barra. Right, but if you look at the switch, the
cylinder and the key, and then you look at how that works as a
system, it has been validated to not only talk about the issue
that you are talking about, about turning, but also the
potential knee interference. Both have been validated.
Ms. Castor. What will the torque specification that the new
switches will make? What is the new torque specification?
Ms. Barra. Well, the specification is 20 plus-or-minus 5,
but the more important thing to look at is the overall
performance of the system, and that is what we have done.
Ms. Castor. Is that 20 newton centimeters?
Ms. Barra. It is 20 newton centimeters, yes.
Ms. Castor. And do you know how GM arrived at that
specification?
Ms. Barra. Well, that was a specification, but we have gone
back and tested extensively with varying levels of keys on
rings, and with varying heights of people--size of people. It
has been an exhaustive testing----
Ms. Castor. Well, here is our----
Ms. Barra [continuing]. That has been done.
Ms. Castor [continuing]. Concern, because when the
committee interviewed several GM engineers, Mr. DeGiorgio, Mr.
Altman and Mr. Stouffer, they all told us they had no idea of
the basis for that specification. And GM has received multiple
reports indicating that the placement of the ignition switch in
these vehicles could cause a driver's knee to hit the key or
the key fob and turn off the switch, isn't that right?
Ms. Barra. Neither of those individuals have been a part of
the company as we have done, or been involved in, all of the
extensive testing and validation that we have done specifically
with the new product integrity organization, so they are really
not in a position to comment.
Ms. Castor. But certainly, that would raise a concern if
your former engineers continue to have concerns over the fix.
Ms. Barra. Well, I don't find Mr. DeGiorgio credible, and I
personally reviewed the testing that has been done by very
experienced, seasoned engineers, and I am confident that the
right validation has been done of the system in the vehicle.
Ms. Castor. I yield back.
Mr. Murphy. Thank you.
Now recognize Mr. Griffith for 5 minutes.
Mr. Griffith. Thank you, Mr. Chairman.
Ms. Barra, we have talked a little bit about the
compensation trust fund, and you have indicated that Mr.
Feinberg is going to set parameters, but you don't have those
yet. He is going to determine who is eligible, and he is going
to make the determination as to how much they are eligible for.
Is that correct?
Ms. Barra. That is correct.
Mr. Griffith. And do you know if he is going to determine--
because most people have focused just on the airbag deployment,
and your list of 13 that you know of at this point only
includes airbag deployment issues. Do you know if he is looking
at other parameters?
Ms. Barra. We have told him that we want to make sure
anybody who suffered harm, either lost a loved one or suffered
serious physical injury because of the defect with the ignition
switch, that they should be a part of the program.
Mr. Griffith. So you acknowledge what Mr. Gingrey was
getting to earlier, and that is, if you are traveling down the
highway at a fairly good rate of speed, whether it be 48 miles
or more, or 35 miles an hour, and all of a sudden your car goes
into a stall or the ignition turns off, you have to put that
into neutral and restart it, that is going to have been
responsible for a number of the accidents that took place,
whether or not the airbags were deployed or, in fact, even if
the airbag not being deployed didn't cause the death or injury,
there might still have been an injury as a result of that. You
acknowledge that?
Ms. Barra. If the ignition switch was part of the issue, we
want them in the program. And there are other incidences.
Mr. Griffith. So then I have to question why you have one
of the two folks in the accident that was referred to in
Trooper Young's accident report, one of those two individuals
is on the list of 13, but Natasha Weigel is not, and that
raises the question, because she was in the backseat. So the
airbag didn't affect her, but clearly that accident may very
well have been the result of the fact that you had a young
driver, as pointed out by Mr. Gingrey, who suddenly finds
themselves in an emergency situation on the highway, going 48
miles an hour, and they don't have an engine that works
anymore. And you would agree that if the engine is not working,
if the power is off, you don't have power steering anymore
either, do you?
Ms. Barra. We were clear about the 13, but again, we want
to get everybody who was affected, and that is what we are
focused on. And so, again----
Mr. Griffith. And you want to make sure that everybody is
fully and fairly compensated, is that correct?
Ms. Barra. That is correct.
Mr. Griffith. Then I have to ask you this question, Ms.
Barra. Why are your lawyers still trying to seek protection in
the bankruptcy court?
Ms. Barra. We are not going to revisit those decisions. I
think what we are doing is going above and beyond with this
compensation program to get to the people. This was a unique
series of mistakes that was made over a long period of time,
and we feel it is the right thing to do to----
Mr. Griffith. So you feel it is the right thing for GM to
continue to ask your bankruptcy lawyers to defend them and get
the shield from the bankruptcy court in the bank--in that
court, and not have to deal with these cases that come up, and
to only let the only solution be Mr. Feinberg, if there has not
already been a settlement, isn't that correct?
Ms. Barra. Mr. Feinberg----
Mr. Griffith. Yes or no.
Ms. Barra. Mr. Feinberg's program is a voluntary program,
otherwise people have the same rights they have today.
Mr. Griffith. They have the same rights, but you are trying
to block those rights in the bankruptcy court, yes or no?
Ms. Barra. Our intent is to do a compensation program, is
to do the right thing for these individuals.
Mr. Griffith. But you are not instructing your lawyers to
back off of their claims in the bankruptcy court, that you want
to be shielded in the bankruptcy court from any claims that
these outside parties might bring. So if Mr. Feinberg's
parameters don't fit, but a competent court might find that
they should fit, not going to matter to you because you have
the bankruptcy protection. I will move on to another question.
I am concerned a little bit about the fact that your legal
department didn't pick this up, and I want to know were any of
the lawyers fired for not being diligent?
Ms. Barra. I have stated that there were four different
functions in which individuals were fired at all levels of the
company, legal being one of them, engineering, quality and
public policy.
Mr. Griffith. OK, because it did concern me that Trooper
Young's report was sitting in the GM files in the legal
department for a period of about 6 years, and only one person
opened the file during that time period, and that was a legal
assistant.
Let me ask you this. Can the lawyers, and I think they
ought to be, but can the lawyers start a safety investigation?
Ms. Barra. Anyone in the company can raise a safety issue.
We want them to----
Mr. Griffith. Yes.
Ms. Barra [continuing]. Thank you, they are more than able
to do that.
Mr. Griffith. And in this case, the lawyers didn't do that,
is that why one of them might have been fired, or some of them
may have been terminated?
Ms. Barra. You know, clearly there were people that didn't
share information to pull all the pieces together in this, and
it is unacceptable, and those individuals that were in the best
position to share are no longer with the company. And we are
strongly encouraging everybody in the company to raise issues.
I will tell you specifically----
Mr. Griffith. All right, I am about to run out of time, so
I appreciate that, but let me just state this in closing. If GM
truly wants to compensate everybody who has been harmed, fully
and fairly, they ought to ask their lawyers to stop asking the
bankruptcy court for bankruptcy court protection, and let these
matters work their way out.
Thank you. Yield back.
Mr. Murphy. Gentleman yields back.
Now recognize Ms. Schakowsky for 5 minutes.
Ms. Schakowsky. Thank you, Mr. Chairman.
The Valukas report identifies Mr. Ray DeGiorgio, who you
said, Ms. Barra, has no credibility, that the GM design release
engineer, that was his title, as being almost solely
responsible for key decisions to approve the deadly ignition
switch in 2002, and to modify it in 2006.
Mr. Valukas, your report states that one of the key
failures was ``the decision by a single engineer who did not
advise others of his decision to accept an ignition switch with
full knowledge that it fell well below GM's own
specifications.'' Is that correct?
Mr. Valukas. Right.
Ms. Schakowsky. The implication here is that Mr. DeGiorgio
acted alone, but the report describes problems associated with
the ignition switch, aside from low torque, many of which were
known as early as 2001, according to the report, the ``entire
electrical concept needed to be redesigned''. The switch had
significant problems that were known to GM. In his interview
with the committee, and at this point I just want to
congratulate the staff of our committee for the amazing work
that they did independently to investigate all these issues,
that in his interview with the committee, Mr. DeGiorgio told
committee staff that he met with his superiors around February
2002 to inform them that the ignition switch would be delayed.
Attendees at the meeting included the vehicle's chief engineer,
the program engineering manager and electrical directors. It
was clear this switch was getting a lot of attention.
So, Ms. Barra, is it your belief that one engineer, Mr.
DeGiorgio, unilaterally approved a part that had been plagued
by problems from the start?
Ms. Barra. The basic issue is that the switch that he
approved to go into production did not meet the performance
requirements. That was the first mistake.
Ms. Schakowsky. And it was DeGiorgio's alone?
Ms. Barra. He was the one responsible for it.
Ms. Schakowsky. Knowledge of the problem is important.
Torque problems plagued the switch from the start, and the
Valukas report says in 2006, Mr. DeGiorgio, again, unilaterally
approved changes to the switch to increase the torque. Mr.
Valukas' report notes ``there is no evidence that DeGiorgio
told others at GM, including engineers on the Cobalt program,
about the spring change to the ignition switch that he
authorized in April of 2006.''
So, Mr. Valukas, the report does note that other GM
employees had received documents describing the ignition switch
change as early as June 2006, and that these documents clearly
indicated that the switches used in pre-2007 models were not
within specifications. Is that correct?
Mr. Valukas. The answer to that question is there were e-
mails which were forwarded to other individuals which,
contained within those e-mails, after the change was made,
information about the fact that the torque had changed. We
interviewed those individuals. Those individuals were by and
large in the warrantee area. They were looking at something
that--it meant nothing to them as they--the two that we were
able to locate and find, it was not--they were totally unaware
of the issues concerning the switch not deploying any aspect of
it. So the one individual who did know all of the facts and had
that information was Mr. DeGiorgio. The other engineers who
were on this e-mail chain, it meant nothing to them.
Ms. Schakowsky. OK. But there is an e-mail----
Mr. Valukas. Yes.
Ms. Schakowsky [continuing]. I am holding it here, cited in
your report, discusses implementation of the new----
Mr. Valukas. At page 102 and----
Ms. Schakowsky. I believe that is right. And the quote is
``increased torque forces to be within specifications'', and it
was sent to five GM employees on June 2, 2006. But we have also
obtained another document that was not included in your report,
and this document indicates that another GM contract engineer
may have approved the 2006 change. It is a production part
approval process report obtained by Delphi through GM's global
quality tracking system. It is dated June 1, 2006, and it lists
a GM quality--supplier quality engineer. The document has a
section labeled ``supplier quality engineer notes'', and these
notes read--this is a quote, ``new PCB and spring plunger
implementation for performance improvement. Part approved per
supplier. Submitted, warrant and GM 3--3660.''
So, Mr. Valukas, have you seen that report, the global
quality tracking system?
Mr. Valukas. Yes.
Ms. Schakowsky. So did you interview the listed supply
quality engineer, or look into what role he might have played
in approving the switch change in 2006?
Mr. Valukas. We did the following. We looked at that form
change, and what happened with that form change is the
following. So the supply quality engineer's function is to
determine whether the boxes are filled out and materials are
properly identified here, and then he submits that and puts
that into the system. He does not have, as we understand it,
anything to do with making decisions on the change. He's
actually functioning as somebody putting something into the
system. Did we do an interview? I don't think we interviewed
that particular individual. We know what his function was and
what the role was.
Ms. Schakowsky. Well, I don't want to minimize Mr.
DeGiorgio's role or excuse his actions in any way, but I do
think these documents going to the fact that the problem at GM
is deeper than just one rogue engineer.
And I yield back.
Mr. Murphy. Thank you. Yields back.
And now recognize Mr. Johnson from Ohio for 5 minutes.
Mr. Johnson. Thank you, Mr. Chairman.
Mr. Valukas, your report discusses an early May 2005 e-mail
related to a customer concern about the ignition switch. That
is at tab 12 of the folder that you have there. Your report
focused on Mr. DeGiorgio's awareness of this exchange. There
were others on this exchange, including Doug Parks. What was
Doug Parks' position at the time?
Mr. Valukas. I honestly don't recall his title at that
time.
Mr. Johnson. Wasn't he the vehicle chief engineer?
Mr. Valukas. He may well have been. As I say, I don't
recall.
Mr. Johnson. Why was it more significant that Mr.--let us
assume that he was, because that is what we think he was, why
was it more significant that Mr. DeGiorgio was aware of this
exchange rather than the vehicle chief engineer?
Mr. Valukas. I don't know that it was more significant. It
was significant because Mr. DeGiorgio ultimately made the
decision to change the part. And in our interviews with him, he
said that he was not aware of the fact that this was an issue,
that he was not aware of the publicity and was not aware of the
e-mail traffic concerning this, while we had information that
that was not, in fact, the case.
Mr. Johnson. What is the chief engineer's responsibility?
Mr. Valukas. Within the company?
Mr. Johnson. Yes.
Mr. Valukas. And I do not have an answer for that.
Mr. Johnson. OK.
Mr. Valukas. But I can find out and I would be happy to
submit that information.
Mr. Johnson. Ms. Barra, do you know what the chief
engineer's responsibility is?
Ms. Barra. The chief engineer is responsible for the
overall integration of the vehicle, and making the balance and
tradeoff decisions for that vehicle.
Ms. Johnson. OK. What----
Ms. Barra. And if issues are raised to him, then he or she
will deal with that.
Mr. Johnson. OK. What knowledge should someone in the chief
engineer position have about the vehicle, compared to someone
such as Mr. DeGiorgio? I mean would it be reasonable that the
vehicle chief engineer would have known about this situation?
Ms. Barra. Again, there are 30,000 parts on a car. The
chief engineer has to count on the people doing their job. We
have now put--in the mid-2000s there were validation engineers
that were added to make sure that the process was done well,
and now with the product integrity organization, we will be
validating the subsystems. But the chief engineer----
Mr. Johnson. Takes information from those that----
Ms. Barra. Right.
Mr. Johnson [continuing]. Come up, OK.
Ms. Barra. The system works----
Mr. Johnson. I have to move on. In a May 4 response to this
chain, Mr. Parks requests a plug to insert in the key head,
since it appears to be the only, in his opinion, ``only real
quick solution.'' But this solution was not implemented for
months.
Mr. Valukas, do you know why?
Mr. Valukas. Park of the dysfunction of what was happening
in the organization. They were treating this as a customer
convenience issue, rather than safety issue, so they looked at
issues in terms of price, expense, cost----
Mr. Johnson. Rather than safety.
Mr. Valukas. That was it.
Mr. Johnson. OK. A few weeks later on May 17, a new PRTS
was initiated. At the time, the program team decided to pursue
additional solutions beyond the service fix for the key insert,
a short-term production fix for a new key that changed the slot
to a hole, and a long-term solution to introduce a more robust
ignition switch. Who was responsible for initiating and
implementing these changes?
Mr. Valukas. These would have been the committees which
were involved in the--and I don't have the committee name in
front of me, I will look at the report, but the committees that
were involved in the review, and ultimately they didn't do what
they said they were going to do.
Mr. Johnson. Were they reviewed by the vehicle chief
engineer?
Mr. Valukas. I don't know that.
Mr. Johnson. You don't know. Do you know?
Ms. Barra. As I read the Valukas report, I think that--I
think what you are referring to was continuous improvement
team----
Mr. Johnson. OK.
Ms. Barra [continuing]. And I believe the chief was not
there, it was the program engineering manager.
Mr. Johnson. Why did it take until 2009 to implement the
new key head, and who was responsible for ensuring that this
change was implemented? Do either of you know?
Mr. Valukas. I can tell you that the reason it was delayed
was because it was treated again as a customer convenience
issue. They had an issue with regard to their supplier, and a
dispute with regard to his ability to deliver, and it wasn't
until 2009 that the dispute was resolved, and they ultimately
made that change with regard to the key.
Mr. Johnson. OK. Ms. Barra, in my previous life, I worked
in a publicly traded company as a part of the executive team.
We had a risk and compliance department. We had a risk and
compliance director. My understanding of this issue, part of
the concern that you have addressed, and that you are
continuing to address, is that this information never bubbled
up to some of the key decision-makers. The SEC requires, there
are laws that require reports of risk and compliance-related
issues. Were any of the SEC reports, or did the risk--were the
risk and compliance folks notified that millions were being
paid out for claims as a result of some of these problems? How
does it break down that bad in a company that is publicly
traded?
Ms. Barra. I can't speak to specifically what was in an SEC
report, but what I can tell you, it is unacceptable the way
things broke down, and that is why we have made dramatic
process changes. But as Congresswoman DeGette indicated as
well, we have to make substantial changes in the culture, and
we are well on our way to doing that. And I believe the men and
women of General Motors want to make sure we have the safest
and the highest quality vehicles on the road.
Mr. Johnson. OK. Thank you, Mr. Chairman. I yield back.
Mr. Murphy. Gentleman yields back.
Now recognize Mr. Tonko for 5 minutes.
Mr. Tonko. Thank you, Mr. Chair. And welcome to our panel.
As we examine what went wrong on this terrible tragedy, the
most important job, I believe, for Congress is to strengthen
and improve auto safety laws to ensure that something like this
never happens again. We certainly owe it to the families of the
victims of this tragedy, many of whom are in our audience today
for the hearing.
That being said, one area that I believe we need to address
is to improve early warning report data.
Mr. Valukas, can you describe briefly early warning report
data?
Mr. Valukas. What is the data itself?
Mr. Tonko. Yes.
Mr. Valukas. Information that comes to the attention of the
company which indicates that there are potential safety
problems of which they are required to make alerts.
Mr. Tonko. And I believe the 2000 TREAD Act requires that
the information be reported to NHTSA?
Mr. Valukas. That is correct.
Mr. Tonko. So, Mr. Valukas, you describe a number of cases
where GM investigators analyzed this TREAD data to attempt to
identify or explain airbag non-deployment in Cobalts and Ions.
Is that not correct?
Mr. Valukas. In the Ions, yes. The answer is I cannot give
you a number of where that was done.
Mr. Tonko. And the federal regulators also conducted
analyses of the early warning report data, but were not able to
separate the wheat from the chaff, so to speak, and identify
the defect?
Mr. Valukas. The issue of the non-deployment of the airbag
was a matter of discussion in 2007 between NHTSA and General
Motors. We note--it was NHTSA saying we note that there are
these non-deployments. GM's response to that was to begin an
investigation under Mr. Sprague to keep a chart of what was
taking place. There were no major further discussions about
that issue until 2013.
Mr. Tonko. It seems that part of the problem here is that
early warning report data provided to NHTSA are reported in 23
broad categories. In the case of this defect, the early warning
data provided to NHTSA spans several categories, including
engine, airbags, and a category of other. NHTSA is able to
request more detailed information from auto manufacturers for
individual warrantee claims and field reports, but it is
difficult to know what is--what to request, given the minimal
level of detail provided in the first place. NHTSA needs more
detailed early warning data so that they can spot trends, and
request the most useful follow-up information from the auto
manufacturers, and more early warning data should be available
to the public. We can all appreciate the value of outside
experts in spotting issues that otherwise go undetected.
Finally, NHTSA needs appropriate enforcement mechanisms to
ensure auto manufacturers comply with the laws, especially when
safety is at stake.
On May 16, GM agreed to pay the maximum fine for failure to
report a safety-related defect to NHTSA, and that, I believe,
is $35 million. Ms. Barra, what was GM's net income in 2013?
Ms. Barra. Three point--yes, I was going to say, it was
just under $4 billion.
Mr. Tonko. Just under $4 billion. So the penalty for
failing to report the ignition switch defect is less than 1
percent of GM's earnings for last year.
Ms. Barra. That is correct math, but I think our intent is
that we deal with safety issues. By the time you get to talking
about a fine, the customer has already been impacted in an
incredibly negative way. We want to make sure we are putting
high quality, safe vehicles on the road, and we want to work in
cooperation with NHTSA to do that.
Mr. Tonko. Nonetheless, it is not much of a deterrent, Mr.
Chair. We need to increase this maximum penalty. Thirty-five
million dollars is not an adequate deterrent to a large
profitable company like GM. If the penalty for inaction had
been higher, GM might not have waited over a decade to report
this safety defect to NHTSA. And it is clear to me that NHTSA
needs higher penalty authorities. We need to make certain that
the penalty for not reporting a safety defect is a sufficient
threat to deter auto companies from needlessly delaying safety
decisions. Fixes in these areas, like the TSB's public
improving early warning report data, and increasing penalties,
should be easy for us to agree upon.
And with the seconds that I have remaining, the GM recall
Web site indicates that, even after the new switch is
installed, customers should ``only utilize the key, key ring
and key fob, if equipped, that came with the vehicle.
Ms. Barra, many consumers have key chains with multiple
keys. Why, if the new replacement switch is adequate, does GM
still recommend that consumers not use their full key rings the
way they would normally use them?
Ms. Barra. Again, the system meets and has been validated,
and that has been validated also by NHTSA, but as I have gone
through this process over the last 3 months, I have seen
incredible things on key chains that, across the industry--I
think this is actually an industry issue that we have to look
at. I notice key chains everywhere I go now, and I just think
it is something that needs to be addressed more broadly across
the industry.
Mr. Tonko. Thank you, Mr. Chair. I yield back.
Mr. Murphy. Thank you.
Now recognize Mr. Long for 5 minutes.
Mr. Long. Thank you, Mr. Chairman. And thank you all for
being here.
Mr. Valukas, do you feel like that you conducted a thorough
investigation?
Mr. Valukas. Yes.
Mr. Long. According to what you testified to today, if my
math is right, how many people were on that team? How many
people investigated along with you?
Mr. Valukas. The number of individuals who were employed at
one point or another in reviewing documents, doing interviews,
several hundred.
Mr. Long. Several hundred. According to my math, you all
looked at 1,220 documents a minute.
Mr. Valukas. I am sorry, say that again, Congressman.
Mr. Long. I said, according to my math, you all looked at
1,220 documents a minute, if you said you had access to 41
million documents over a 70-day period--I don't know how in the
world you could do a thorough investigation in that time frame.
Mr. Valukas. Congressman, we used computers and programs to
analyze the documents for purposes of kicking out those
documents which are reflective of the issues that are here. We
used as part of that database, requests were being made by
Congress, requests were being of us by the United States
Attorney's Office, by NHTSA, and we isolated those documents
and then gave them, through three levels of review, for
purposes of determining whether they were relevant to any
aspect here. I feel very comfortable, I can't tell----
Mr. Long. But back to my first question, do you think it
was a thorough investigation? I am not in your business, and
you are, so I am just trying to learn here.
Mr. Valukas. Well, I am sorry.
Mr. Long. Yes, so the report that you released, were you
given a deadline by General Motors on when that needed to be
out?
Mr. Valukas. General Motors, the Board of Directors, when
they employed me to do this investigation, asked me whether I
could get it done within a certain time frame, and I told them
we could. That was the deadline; was my commitment that we
could do it in that time period. Part of that was associated
with the fact that they wanted to know because there were
deaths involved here, what caused it, what were the problems.
Part of it was because we wanted to get the report out or to be
able to respond to Congress. So we had that deadline.
Mr. Long. And you got your report completed, or once you
completed the report, to whom at General Motors did you present
the results?
Mr. Valukas. The Board of Directors.
Mr. Long. OK. And what was their reaction?
Mr. Valukas. The reaction. I can't tell you what their
reaction was. I know the reaction was that, as what you have
seen with Ms. Barra here, is to follow up on it.
Mr. Long. OK, so you didn't receive any resistance to your
findings or your recommendations from the Board?
Mr. Valukas. None. None.
Mr. Long. And were you asked to make any changes to your
report?
Mr. Valukas. No, I was not, and what I did tell them, and
what I have mentioned to to staff here, that if we found
something different as we pursued, continued to gather
documents because there were requests here and elsewhere, we
would review the report, and if there was anything in the
report that we found to be in error, or needed to be corrected,
or changed or anything, we would report that back to the Board,
and I presume they would report it back to you.
Mr. Long. So other than that, your report, does that end
your investigation. And I apologize, I have been here for about
90 percent of the hearing, but I did have to step out for a few
minutes a few minutes ago, so----
Mr. Valukas. No, we believe we have completed the inquiry,
but as I say, we would update it if we found something which
changed in any significant way. I believe back last week we
found something in the report that we corrected, and we
notified your staff of that immediately.
Mr. Long. OK, thank you. And I yield back.
Mr. Murphy. Mrs. Ellmers, you are now recognized for 5
minutes.
Mrs. Ellmers. Thank you, Mr. Chairman. And thank you to Ms.
Barra and Mr. Valukas for being here today for this very, very
serious subcommittee hearing. And I too, as some of my
colleagues have said, extend my condolences to the families. It
must be very difficult for you to be here and listening to this
dissection of information. As important as it is, these are
your loved ones.
Mr. Valukas, this is more of a process question that I have
for you, sir. Going back, again, over the investigation and
what you have reported, back in March 2007, it says staff from
NHTSA approached GM personnel in between meetings in Washington
and mentioned a concern about non-deployments of the Cobalts
and Ions. What is your understanding of the information that
was shared by NHTSA?
Mr. Valukas. My understanding, it comes from the
interviews. I did not talk to anybody from NHTSA. We did not
think that we were going to be interviewing federal officials.
We interviewed the people at GM, and looked at the documents
and materials which they produced as a result of that meeting--
--
Mrs. Ellmers. Yes.
Mr. Valukas [continuing]. And it was that, in the course of
that meeting, NHTSA noted that there had been these non-
deployment cases and asked General Motors about them. The
response to that was the assignment of Mr.--I believe it was
Mr. Sprague at that point, to look into it and how to document
what was taking place, to keep a chart essentially as to are
these happening, how many are there, et cetera.
Mrs. Ellmers. OK, and the gentleman that you are referring
to, what division was he in--I am assuming General Motors or
NHTSA? What division was he part of?
Mr. Valukas. He was an investigator, I believe, with FPA.
Yes, FPA investigator, which means he would have been detailed
into the legal department.
Mrs. Ellmers. OK, so according to our information, when the
engineers returned to Michigan, apparently after being here in
DC, the product investigations team, the group that determines
the root cause of the problem, reviewed the claims relating to
the Cobalt non-deployment, but ultimately decided not to pursue
it. Why did the product investigations not pursue this matter
at the time?
Mr. Valukas. That is a very good question, and the answer
is, this was one of those things that was passed off to another
agent. Mr. Sprague was keeping track of it. The other
investigators weren't following up with regard to it. They were
gathering information, if you will, but that is where they went
with it.
Mrs. Ellmers. OK. So when you say that it was kind of
handed over somewhere else, you are referring to the product--
the field performance assessment----
Mr. Valukas. Yes.
Mrs. Ellmers [continuing]. Division?
Mr. Valukas. Yes.
Mrs. Ellmers. OK, because according, again, to our
information, it says after the product investigators declined
to investigate, the responsibility for tracking these claims,
or tracking these claims--there again, I think that is
something significant as well, was assigned to the field
performance assessment division.
Mr. Valukas. Right.
Mrs. Ellmers. Now, do you consider this to be unusual, like
an unusual pattern to have followed? Would this be typical in a
situation where there has been an obvious issue that has come
to light, and it just kind of be passed off to another--and I
guess I would like to know too, one, it was given to another
division, but what exactly is the field performance assessment
division responsible for, and was this just a way to put aside
the problem because they weren't focusing on it?
Mr. Valukas. Well, I don't know if it is typical. I do know
it happened in this case, and it was one of the things we
called out on the report of passing off responsibility from one
committee to another committee. FPA would be focused on
potential claims in the legal department----
Mrs. Ellmers. Yes.
Mr. Valukas [continuing]. And whether or not to have
litigation, or things like that, which indicate the existence
of these problems, but they are not the products investigators,
they are a different group. But then here is what you have, is
you had it passed off to Mr. Sprague----
Mrs. Ellmers. Yes.
Mr. Valukas [continuing]. Who then gathered information
about it for years, and nothing else was taking place other
than gathering that information, until 2009. So everything was
in hiatus.
Mrs. Ellmers. Do you know who it was that actually made or
authorized that change, who gave the assignment to Mr. Sprague?
Mr. Valukas. No, I don't. I mean I don't know if we have a
name. I can get a name for you if----
Mrs. Ellmers. OK. I----
Mr. Valukas [continuing]. You want a name.
Mrs. Ellmers [continuing]. If you could, that would be
incredibly----
Mr. Valukas. Absolutely.
Mrs. Ellmers [continuing]. Important information for us as
a committee to have. Thank you.
Mr. Valukas. I know the legal department was at the meeting
with NHTSA, so it was as if the legal department said, well, we
will take a look at this and then they went forward. But I will
get you a name.
Mrs. Ellmers. Did the FPA ever attempt to evaluate the
matter back in the product investigation? Was there ever an
attempt, according to your investigation, did anybody address
these issues?
Mr. Valukas. Yes, in--well, in 2009, when they had the
second continental----
Mrs. Ellmers. Yes.
Mr. Valukas [continuing]. Report, then it became elevated,
if you will. They looked at it, they realized that it was
something that could be associated with the switch as being the
cause of the non-deployment----
Mrs. Ellmers. Yes.
Mr. Valukas [continuing]. And at that point, other things
started to take place, including Mr. Sprague going to visit Mr.
DeGiorgio and asking him whether there had been a change in the
switch, and him saying no.
Mrs. Ellmers. OK, so I guess my last and final question
here was basically, was there a reluctance there, but I believe
you just indicated that there was--and a reluctance to actually
acknowledge and address the issue.
Mr. Valukas. I am sorry, I----
Mrs. Ellmers. I am sorry, that would probably be
hypothesizing on your--thank you, Mr. Chairman, for your time,
and thank you.
Mr. Murphy. Gentlelady's time has expired.
Now it is the committee's practice that if another member
of the full committee can ask questions after other members
have asked theirs. And so we now recognize Mr. Terry, who is
the chairman of the Subcommittee of Commerce, Manufacturing,
and Trade, for 5 minutes.
Mr. Terry. Thank you, Mr. Chairman. And I too want to
recognize the parents and family members in the back. Those
photographs up there really keep reminding us why we are here
and investigating today.
Mr. Valukas, I want to ask you because I want to go back
to--I am still stuck on how these sub-spec parts were even
allowed at the very beginning of the process. So in that
regard, the production part approval process that they go
through when they do the testing, would that 2002 PPAP package
be a key document in this investigation?
Mr. Valukas. It certainly would be something I would want
to see. I think we started out, I don't think we ever found it,
and we have asked Delphi for it and we don't have it.
Mr. Terry. And Delphi wouldn't produce it?
Mr. Valukas. They informed us they don't have it.
Mr. Terry. They don't have it. Do you believe that?
Mr. Valukas. I can only report what they told us. We made
requests from them from the very beginning for access to any
and all documents relating to this matter. What they produced
to us were a limited number of documents which were documents
that had actually been exchanged with us, at least initially. I
think we may have received a few additional documents over the
time, but that is what we got.
Mr. Terry. So no one has been able to locate the PPAP on
the ignition parts?
Mr. Valukas. That is my understanding.
Mr. Terry. Ms. Barra, do you know whether or not the PPAP
for this ignition parts from 2002 exists?
Ms. Barra. I don't. I believe Mr. Valukas and his team
would have found it if it does exist, but what I can tell you
is the part should have never been put in production.
Mr. Terry. Agree, and I am proud you said that, but it
would have been great to discover that in 2002 during the PPAP
process. And the fact that it wasn't is disturbing in and of
itself, and that is why I think those documents are extremely
important, as you do, Mr. Valukas.
Should this committee consider a subpoena of those records
since they were not produced? Even though----
Mr. Valukas. You are putting me where I cannot go. The
committee is going to conduct its investigation. Let me say
this, and I think this is important. It is clear, at least from
our fact-finding, that Mr. DeGiorgio approved this part----
Mr. Terry. Yes.
Mr. Valukas [continuing]. And he approved this part knowing
it was well below specifications, and we did not find anybody
else who was involved in it, though Delphi certainly knew that
the part that was being approved was below specification.
Mr. Terry. And in that respect, you have this binder by
you, and if you would turn to tab 4, and it is a memo from
Raymond DeGiorgio regarding the talc issue. Now, this is an e-
mail from around April 2002, it is around the time the original
switch was actually being approved, is that correct?
Mr. Valukas. Yes.
Mr. Terry. And the subject here is GMX 357 talc issue for
the Saturn Ion, correct?
Mr. Valukas. Correct.
Mr. Terry. And that talc--what rule does the talc testing
have on the approval of the switch, do you know?
Mr. Valukas. It is part of the process. It is how does it
feel--it has been explained to me, how does it feel when you
make the turn, they wanted to make it feel like it was a
European sports car or something like that.
Mr. Terry. Well, does this e-mail to Raymond DeGiorgio the
answer from Mr. Reineke, does that raise any concerns to you as
the investigator, particularly the sentence that Mr. Reineke
did not find spring back from crank run to accessory as Terry
Meehan and others had observed.
Mr. Valukas. No.
Mr. Terry. Were you aware of these discussions around the
time of the switch approval about the feel of that ignition
switch?
Mr. Valukas. Yes.
Mr. Terry. OK. In the last 30 seconds, you mentioned that
there was an adversarial feeling between NHTSA and GM. Have you
concluded who is responsible for the adversarial relationship?
Mr. Valukas. No, I have not, but I just noted from the
documents, and this is not from testimony; more from the
documents, just the tone of the documents, and that is maybe an
incorrect way to assume something, but that from the tone of
the documents, it suggested that there was some nature of
adversarial activity here.
Mr. Terry. One quick last question. There were many times,
looking through the documents, that under the TREAD Act, GM
should have provided notice to NHTSA. Does this adversarial
relationship between the two impact their decision not to
provide that notice?
Mr. Valukas. No. When I say no, let me explain what we did,
and someone else will make that judgment in a different
context. We went back through all of the disclosures, the TREAD
Act disclosures, to look to see whether something was or was
not disclosed, and, at least as best we could tell, marking
those disclosures, what the information which was then in
possession by virtue of the interviews or documents we had, it
appeared to us that the TREAD disclosures were compliant, but I
will not be the ultimate judge of that.
Mr. Terry. Thank you, Mr. Chairman. Thank you for the
additional time.
Mr. Murphy. Thank you. Gentleman yields back.
Now Ms. DeGette and I will each have the final 5 minutes.
All right, Ms. DeGette, recognized for 5 minutes.
Ms. DeGette. Thank you, Mr. Chairman.
Mr. Valukas, I wanted to follow up on a couple of questions
Mr. Johnson was asking you. Your report says on page two: ``GM
engineers concluded that moving stalls were not safety issues
because drivers could still maneuver their cars. As a result,
GM personnel viewed the switch problem as a customer
convenience issue, something annoying but not particularly
problematic, as opposed to the safety defect it was.'' Is that
right?
Mr. Valukas. Correct.
Ms. DeGette. And you told Mr. Johnson--so, therefore,
because they called it a customer convenience issue, they
looked at issues of pricing and issues like that, not issues of
safety. Is that right?
Mr. Valukas. That is correct.
Ms. DeGette. And this was despite the fact that, really
pretty early on, GM started getting a lot of complaints about
the ignition shifting into neutral, and the car losing all
power. Is that right?
Mr. Valukas. That is correct.
Ms. DeGette. In fact, in a review of the Cobalt in the New
York Times, the freelance writer said that his test Cobalt
driven by his wife stalled after her knee bumped the steering
column, right?
Mr. Valukas. There were reports in New York Times and other
newspapers----
Ms. DeGette. And Cleveland Plain Dealer--and others, and so
I find--this kind of boggles my mind. A car could be going down
the highway at a high rate of speed, 65 miles an hour, and it
gets bumped, it goes into neutral, and then everything stops,
the power steering, the brakes, the airbags. That is what
happened to Brooke Melton, where she is driving down the
highway in Hiram, Georgia, on her 29th birthday, the ignition
stops, the car loses power, she goes into the other lane and
she is killed. Do you know about that case?
Mr. Valukas. I know about that case.
Ms. DeGette. Yes.
Mr. Valukas. I certainly do.
Ms. DeGette. And so yet the GM engineer said that this was
a convenience issue, right?
Mr. Valukas. They not only said it internally, they said it
publically when they were interviewed by the Press. They said
this is our position, that a stall does not constitute a safety
issue, and that----
Ms. DeGette. But that----
Mr. Valukas [continuing]. Was one of----
Ms. DeGette. That is just insane, isn't it?
Mr. Valukas. I don't--won't use the word insane, but----
Ms. DeGette. OK.
Mr. Valukas [continuing]. I am troubled by that.
Ms. DeGette. Yes, OK, good. Now, at the same time, GM was
talking to NHTSA about whether stalling was a safety risk. Are
you aware of that?
Mr. Valukas. I am aware there were conversations for all
this period of time.
Ms. DeGette. Now, Ms. Barra, were you aware that at the
same time NHTSA was talking to GM in June 2004, that General
Motors recalled 15,000 Oldsmobile Bravadas and Envoys because
of stalling risks?
Ms. Barra. I was not involved in that area at that time.
Ms. DeGette. So you are not aware of that?
Ms. Barra. No.
Ms. DeGette. Well, Gay Kent signed that notice, and was Gay
Kent reporting to you at that time?
Ms. Barra. No.
Ms. DeGette. OK. Did Gay Kent ever express any concern to
you about the stalling and safety risks from the Ions and
Cobalts?
Ms. Barra. No.
Ms. DeGette. OK, so basically, what you are saying in your
report, Mr. Valukas, is you have these cars that stall out at
any speed really, and all of the power goes out, but yet the GM
personnel maintained this was a customer convenience issue?
Mr. Valukas. That is where they were, absolutely, from 2005
through 2009 at least.
Ms. DeGette. OK. Now, have you ever talked to a fellow
named Clarence Ditlow, who is with the Center for Auto Safety?
Mr. Valukas. I have received correspondence from him.
Ms. DeGette. Did you receive this letter dated June 17,
2014, from him?
Mr. Valukas. In the packet?
Ms. DeGette. I am sorry?
Mr. Valukas. Is it in the material that was just given to
me?
Ms. DeGette. I don't know, but we can hand you a copy. And
Mr. Ditlow's conclusion is that the Valukas report is clearly
flawed and accepting GM's explanation that its engineers and
senior managers did not know stalling was safety related. Are
you aware of this claim that Mr. Ditlow made?
Mr. Valukas. I am aware of his claim. Actually I know I
read this letter and I sent him back a nice note saying thank
you for the information.
Ms. DeGette. And what is your view of that?
Mr. Valukas. My view is that he didn't read the report and
understand what my responsibility was here. You have asked for
my view, let me give my view. What we were charged to do, and I
think this is very important to understand, we were charged by
the Board of Directors, find the facts concerning how and why
this occurred. We were charged with laying those facts before
the Board, and we were charged with making recommendations. And
the Board was charged with the responsibility, I presume, of
making decisions whether or not the employees within the
organization, to the top level, lived up to their
responsibilities. That was where the Board's responsibility
was. So the suggestions in here that, we didn't cover people or
we were----
Ms. DeGette. So----
Mr. Valukas [continuing]. That we exonerated certain people
is not--is just simply not correct.
Ms. DeGette. Mr. Valukas, I really appreciate that answer
because you clearly delineated what you were hired to do, and
you believe you were hired to do that, correct?
Mr. Valukas. That is correct.
Ms. DeGette. Now, so there may be other information that
this committee needs to gather beyond your report, right----
Mr. Valukas. That is----
Ms. DeGette [continuing]. And conclusions?
Mr. Valukas [continuing]. Absolutely possible, and as I
said before, if we found new information as we went along which
reflected that, we would share it.
Ms. DeGette. You will share it with this committee,
correct?
Mr. Valukas. Share it with the----
Ms. DeGette. Thank you. Mr. Chairman, I would ask unanimous
consent to place this June 17 letter into the record, and also
a report by the American Association for Justice, entitled
Driven to Safety, from June 2014, talking about some of the
lawsuits that we have involved in this issue.
Mr. Murphy. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Ms. DeGette. Thank you very much. And thank you again for
coming, both of you, today.
Mr. Murphy. Thank you. Dr. Burgess wanted to make that
follow-up question about the phone number.
Mr. Burgess. The unanimous consent request, since I brought
it up, to put into the record 1-800-222-1020, is the customer
service number that should be available to customers of General
Motors, and also just the observation we are talking about the
non-deployment of an airbag, which is a supplemental restraint
system, the primary restraint system is the seatbelt, and I do
encourage people, you have to wear your seatbelts when you
drive on the highways.
And I will yield back.
Mr. Murphy. Thank you.
I now recognize myself for a final 5 minutes here.
I just want to be clear, Mr. Valukas, so when you said when
you get additional data, and it was very clear in your mandate
from Ms. Barra that she wanted this to be thorough, basically
no stones unturned, that if you received that other information
from plaintiffs' attorney, I hope you will share that with us.
You said that they have not responded to you as of yet, but if
there was information that they have with regard to delays from
General Motors' attorneys in getting them information, I hope
you will review that and let us know.
Mr. Valukas. And I would like to be clear, simply because
of my responsibilities here, I will gather that information.
Whatever we do, we would have to share with the Board of
Directors. They will make the decision as to disclosure, but in
this instance, they have made those decisions up to this point,
so----
Mr. Murphy. Thank you.
Ms. Barra, a couple of points. I want to make sure we are--
now with the benefit of time, we recognize that the Cobalt and
several other automobiles had a defective switch. That switch,
for a couple of reasons, hitting a pothole, a bump, bumping the
key ring with your knee, or a heavy key fob, could have moved
that on switch into an accessory position, correct, cause a
stalling of the vehicle, subsequent loss of power steering and
power brakes when the engine was not on, and also the airbags
would not deploy. All those things are clear, right?
On page eight of Mr. Valukas' report, there is reference to
a technical service bulletin from 2005, and it says in here
that the technical service bulletin counseled customers to
remove heavy items from the key rings, and offered an insert to
the key that would reduce the likelihood that the ignition
switch would rotate inadvertently. That bulletin did not refer
to the problem as ``stalling,'' however, precisely because
General Motors believed customers might associate stalling with
a safety problem, and only a customer who had already
experienced a stall who came to a dealer to complain, would get
information about the proposed solutions. Other customers would
remain unaware of the problem, as well as GM's proposed
solutions.
I am assuming that if you knew then what you knew now, you
would not have allowed that sort of bulletin to be written in
that way?
Ms. Barra. That is correct.
Mr. Murphy. Thank you. Now, I want to, however, refer to
something that is taking place today, which it is important for
you know. That is, I took a look at the GM current Web site
with regard to the safety recall. Your comments are under your
speech, et cetera, and I go to the section marked frequently
asked questions. Under the item number 7, ``are the recalled
vehicles safe to drive?'' You say, the simple answer to that
question is yes. The GM engineers have done extensive analysis
to make sure if you use only the ignition key with no
additional items in the key ring, that the vehicle is safe to
drive.
Ms. Barra. And that is true. We have validated that. It has
also been validated by NHTSA.
Mr. Murphy. The old Cobalts that could also go into a
stall----
Ms. Barra. We are talking about as long as you have just
the key or the ring, you don't end up having the moment and you
don't have an ability to trap it with your knee, that that
condition is not going to occur. That is what that statement is
referring to.
Mr. Murphy. They still could not hit it with their knee?
OK.
Ms. Barra. The issue is when you look at just the key, you
don't create a moment to be able to do that.
Mr. Murphy. But still what it does not say at all in this
statement, customer, if you don't do this, your car may stall,
you may lose power steering, you may lose your brakes, you
won't have your airbag, this is an extreme safety concern. It
simply says this isn't a big safety deal. And then you even say
once a service repair is completed, can customer put a heavy
key ring back on, you say, well, we recommend only utilize the
key, key ring and key fob, if equipped, that came with the
vehicle. So you say if you repair this, with the previous item
that I just quoted, if you repair this, you will be fine, and
later on you say, but don't change the key issue, so I don't
understand how that is fixed.
Ms. Barra. Well, first of all, on the FAQ, the frequently
asked questions that you are referring to, that--there are a
number of questions, and there were also opening statements. I
know I personally recorded videos that we have on our Web site
to truly communicate what we need to do. It has been included
in our letters. So I think you have to look at the complete
communication, not one question.
OK.
Mr. Murphy. But my point is this. I am making
recommendations to you. You have come before our committee and
I believe you have been trying to be honest and
straightforward. My recommendation to you is there are how many
Cobalts still out there, how many Ions, how many other cars
that are affected by this?
Ms. Barra. Something less than 2.6 million.
Mr. Murphy. Two point six million. And so far, I forget how
many you said in your Web site have been repaired.
Ms. Barra. Almost 200,000.
Ms. Murphy. OK. That is a lot of cars out there----
Ms. Barra. Right.
Ms. Murphy [continuing]. That could still stall, you lose
power steering, you can lose power brakes, you could lose
control of the car, you could crash, your airbags won't deploy,
some will be injured or die. I hope that that becomes a lot
more glaring than simply have him go through and says, no, it
is safe to drive. I don't think it is safe to drive.
Ms. Barra. Congressman Murphy, we have sent letters, we
have gone on social media, I have done videos, our dealers have
been informed, we have done special training sessions. Believe
me, we take it very seriously, and we want people to know that
until their vehicle is repaired, that we want them to only use
the key and the ring. We have done extensive communications
because I don't want any other incidents to occur.
Mr. Murphy. Ma'am, I hear what you have done. I am talking
about what I would recommend you still do.
Look, the unfortunate thing about this is that with all the
things that you do, like in our lives, to all the things we do
to try to communicate with people, many times people don't read
mail, they don't watch commercials on TV, they don't look at
things like this, and so you have to try all levels in that. It
isn't until it maybe gets on a comedy network or something that
people pay attention. I would highly recommend that what you do
in this situation is make it very clear that if you don't do
this, this is a consequence. I would hope that that would be
something GM would make abundantly clear because I may not know
a lot about--but I know as a psychologist what motivates
people, and if you give them the bold, blasting facts, if you
don't do this, you could be in a serious accident, that might
wake up people to understand that in order for GM to work on
safety, customers have to pay attention to this too, and I hope
that that is something that people across America will pay
attention to.
As I said before, I thought this report could be subtitled,
don't assume malfeasance when incompetence will do. There is
more to it than that. We all have to take responsibility. And I
see this as something that I still hope GM does more with
communication.
Ms. Barra. We will redouble our efforts there.
Mr. Murphy. Thank you.
I now want to ask unanimous consent that the Members'
written opening statements be introduced into the record, and
without objection, those documents will be entered into the
record.
And I ask unanimous consent that the document binder from
this hearing be entered into the record, subject to appropriate
written redactions by staff. \*\
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\*\ The information has been retained in committee files and is
also available at http://docs.house.gov/Committee/Search/
Home.aspx?Keyword=Path%3a%22%2fIF02%2f%22.
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Mr. Murphy. In conclusion, I want to thank the witnesses
today and the Members that participated in today's hearing.
I remind Members they have 10 business days to submit
questions to the record, and I ask that the witnesses all agree
to respond promptly to questions.
And with that, I adjourn this hearing.
[Whereupon, at 12:50 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
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