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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."

(Additional reporting by Doina Chiacu and David Lawder, writing by Richard Cowan; editing by Dan Grebler and G Crosse)

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msuizgreat April 02 2014 at 3:55 PM

Nice for GM to throw Barra under the bus. None of GM's problems now are her fault even though she may have known about them. Time once again for GM to take out a full page ad in the newspaper saying how sorry they are for screwing the consumers over. Third times a charm.

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bootladyj April 02 2014 at 6:12 PM

SHAME ON YOU GM...NO MATTER who THE CEO IS...who THE ENGINEER IS THAT DESIGNED and SIGNED OFF ON THIS SWITCH and THEN DENIED DOING SO..
BOTTOM LINE: PEOPLE HAVE DIED BECAUSE GM DIDN'T WANT TO SPEND $.57 TO FIX A SWITCH...ARE WE that GREEDY, FELLOW AMERICANS...??? MAKE GM VISIT EVERY GRAVE OF THE 13 PEOPLE THAT HAVE DIED........SHAME ON YOU GM.... DISGRACEFUL BEHAVIOR...

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sjser April 02 2014 at 5:43 PM

While GM is at fault, I did not like the questioners kicking Ms Barra around. She was not in the driver's seat nor is she personally responsible for this tragedy. GM, like many companies, has poor communication among levels because so many people are covering their backsides. And accountants have drilled into the management a need to cut cut cut.

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Your Excellency April 02 2014 at 4:53 PM

This debacle is a creature created by the GM bankruptcy in 2009. When "Old GM" discharged all of its debts in bankruptcy, ostensibly to comply with the wishes of the Obama Administration to protect the pension funds of the United Auto Workers while at the same time eliminating the franchise contracts of about half of its authorized dealers, it also discharged all of its legal obligations to anyone it had injured or who may be injured by any product built before the bankruptcy. The "New GM" owns the assets of Old GM, but none of the liabilities. This is Bankruptcy Law 101. New GM did not do anything about pre-2009 defective products because it didn't have to.

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2 replies
mishkins17 Your Excellency April 02 2014 at 4:59 PM

Right on, Excellency!!!

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thirdsqurl Your Excellency April 02 2014 at 5:04 PM

That's right, it's all Obama's fault, because in your world, the entire planet revolves around Obama.

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jetscreys April 02 2014 at 5:47 PM

please be aware that it was not to long ago that the US government owned GM, the Feds have ownership of this also

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Joe April 02 2014 at 4:50 PM

Since the Government has gotten involved in the auto industry, GM, Government Motors, in particular. The care and concern for it's customers has dropped to an all time low. GM spends more time trying to avoid honoring warranties and hiding defects. GM should step up and take care of problems as they occur. The GOVERNMENT bailout was money from the American public. NEVER FORGET THE GOVERNMENT DOEN'T HAVE ANY MONEY THEY DIDN'T TAKE FROM SOMEONE. I was a loyal GM customer for about 30 years, NEVER again.

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rtutbucks April 02 2014 at 6:12 PM

Hey, didn't these same elected officials bail out this company? Washington is insane

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nyhowie77 April 02 2014 at 4:15 PM

I write this to all the "weakling politicans" that know how to fund all the lobbyists!!!! for over the last 10 years I have owned 3 cars that had HEADLIGHTS THAT FOGGED OVER"CORRECT THE INFERIOR PLASTICS THE CROOKED CAR MANUFACTURERS USED TO MAKE MORE PROFITS LEFT SOO MANY CAR OWNERS WITH HEADLIGHTS THAT WHERE LOW ON LUMINATION AT NIGHT...we brought our volkswagon passat into the disgusting car dealer who said"I will polish the covers!!!! My POINT IS WHY DONT THE SPINELESS POLITITICANS MAN UP AND DEMAND THAT "ALL CAR MANUFACTURERS PRODUCE HEADLIGHTS THAT WHERE PEOPLE CAN SEE IN THE DARK???DRIVING WITH DEFECTIVE COVERS DIMINISHS THE EFFECTIVENESS OF WHAT IS A"HUGE SAFETY ISSUE" SO COME ON WASHINGTON WAKE UP AND DO YOUR JOBS FOR A CHANGE...WAY TOO MANY CARS WITH SERIOUS LOW HEADLIGHTS PROBLEMS THAT NO ONE WANTS TO ADDRESS...............

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1 reply
madkono nyhowie77 April 02 2014 at 4:21 PM

who was the spinless BOOB, who bought it???

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1 reply
nyhowie77 madkono April 02 2014 at 4:32 PM

yoo madcow....read that I wrote that it was three cars....one was also a GM pontiac...another an audi...it is a systemic issue...by the way"hows elysie your pet cow????or do you travel by billy goat?

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sghenry4 April 02 2014 at 6:12 PM

It's not the recall, it's the cover up. Just ask Tricky Dick. Does anyone really think the "New GM" is different from the "Old GM"? It's the same freaking morons running the show. Even Barra's a holdover. And by the way, where's big mouth Biden and his defense of this rotting dinosaur now?

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Les Jones April 02 2014 at 4:50 PM

Read GM's History The Book is an old one " Chrome Colussus" circa 1980's The company has consistently put money before safety. In the 30's Alfred P Sloan would not adopt safety glass in Gm cars for almost a decade . In the book the pattern is clear . Every safety or emission change was fought tooth and nail by the bean counters in the company . The corsair rollovers would not have happened were a ten dollar part been installed as their own engineer recommended. They fought seat belts for almost ten years saying their customers did not want to pay for them. I just recently re read this old book and it was incredible how the companies DNA or culture or what ever you want to call it fought progress and change as a matter of policy. It was always , these things add too much cost . Hard to see change in the new company " Todays GM" Same as it ever was , Same as it ever was

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