U.S. senator accuses GM of 'culture of cover-up' in recalls
(Reuters) - General Motors Co came under withering attack for its decade-long failure to notify the public about defective parts linked to fatal crashes, as a U.S. Senate hearing opened on Wednesday with accusations that the company fostered "a culture of cover-up."
Democratic Senator Claire McCaskill rebutted some of GM CEO Mary Barra's testimony to a House of Representatives panel on Tuesday that her company had recently cleaned up its act.
"It might have been the 'Old GM' that started sweeping this defect under the rug 10 years ago. Even under the 'New GM' banner, the company waited nine months to take action after being confronted with specific evidence of this egregious violation of public trust," the Missouri senator said.
McCaskill chairs a Senate subcommittee on consumer protection and product safety that is investigating GM. The "Old GM" and "New GM" she referred to were references to General Motors before and after its 2009 bankruptcy.
Committees in the House and Senate are investigating why it took GM more than a decade to recall 2.6 million cars that could have faulty ignition switches and may have contributed to at least 13 deaths. The largest U.S. automaker also faces a criminal probe by the Department of Justice.
Those switches, without warning, can make vehicle engines stall during operation and stop air bags from deploying and power steering and power brakes from operating.
McCaskill said that "a culture of cover-up" caused a GM engineer to deliver untruthful testimony about his knowledge of the defective ignition switch, as part of a lawsuit related to a fatal 2010 crash in Georgia.
Barra, who was promoted to CEO in January, said in her prepared testimony: "While I can't turn back the clock, as soon as I learned about the problem, we acted without hesitation."
As lawmakers over the past two days have pressed Barra for answers on who at GM was responsible for the company's slow response, Barra has referred repeatedly to an internal investigation of the problem that is under way.
Barra told senators the internal probe is "well along," adding that GM hopes to wrap it up in 45-60 days.
GM was not alone in the hot seat during the Senate hearing.
McCaskill, a former prosecutor, complained of the National Highway Traffic Safety Administration's "failure to spot a trend" with GM's ignition switches. That failure came despite a 2000 law aimed at giving the agency improved resources for spotting automaker safety troubles, she said.
Nevada Senator Dean Heller, the senior Republican on the panel, noted that in 2006 or 2007, GM replaced the troubled switch with a redesigned part, but did not change the identifying numbers for the new switch.
"If a company sold a part that was changed in any way and did not change the model number or the serial number on that part it would cause significant problems," Heller said.
Barra responded that issuing a new part without new model or serial numbers was "completely unacceptable."
Republican Senator Kelly Ayotte of New Hampshire shot back: "I think it goes beyond unacceptable. I believe this is criminal."
Besides raising red flags in Congress that the company's use of the same part number could have been an attempt to cover up the redesign at a time GM was insisting it had no problem, documents submitted to Congress also show that the redesigned switch did not meet all of the company's specifications.
In a 2013 deposition related to a suit against GM, Ray DeGiorgio, a senior switch engineer, said he was unaware of a change in the part. But documents submitted by GM to Congress show the engineer signed off in April 2006 on the redesign of the ignition switch.
He is still employed by GM, which has not made him available to comment. While no one has been fired for their involvement in the company's mishandling of the ignition switch, Barra has promised swift action if it is merited once the company's internal probe is completed.
Meanwhile, House Speaker John Boehner, a Republican, told reporters that it was too early to conclude that tougher auto safety legislation would emerge from the congressional investigations.
Noting that about 230,000 pages of documents have been turned over to Congress, Boehner said: "I think it's important for us to get to the facts before we begin to pronounce what we're going to do or not do."