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GM CEO on hot seat today at Congressional hearing



Published: Tue, April 1, 2014 @ 12:00 a.m.

photo

Barra

By TOM McPARLAND

tmcparland@vindy.com

YOUNGSTOWN

During today’s congressional hearing, General Motors CEO Mary Barra will promise members of Congress that “Today’s GM will do the right thing,” as it addresses a faulty ignition switch problem that went overlooked for a decade.

The statement, from the written testimony Barra will give before a House subcommittee today, was posted on the company’s website Monday just hours before the embattled automaker announced the recall of another 1.3 million cars for an electronic-steering glitch.

The subcommittee released a memo Sunday alleging that GM knew about the ignition-switch problem as early as 2005 and twice scrapped plans to fix it. The faulty switches have been linked to at least 13 deaths.

“Sitting here today, I cannot tell you why it took years for a safety defect to be announced in that program, but I can tell you that we will find out,” Barra wrote.

Barra will appear at 2 p.m. in front of the House Energy and Commerce Subcommittee on Oversight and Investigations.

Analysts on Monday predicted that Barra’s testimony would be a balancing act, in which she would have to accept responsibility for the company’s mistakes while also distancing herself and her restructured company from the mistakes of the past.

Karl Brauer, senior analyst for Kelley Blue Book, said Barra would have to navigate an emotional atmosphere that will include some family members of people killed in crashes linked to the defective part.

She also will face contentious questioning from angry federal lawmakers.

“Congress and the politicians will be wanting to show they are angry,” Brauer said. “They have to have somebody answer.”

The GM saga began Feb. 13 when the company announced the recall of nearly 780,000 cars in North America, including Chevrolet Cobalts (made in Lordstown), Pontiac G5s and Pontiac Pursuits, all from the 2005-2007 model years. Twelve days later, the company expanded the scope of recall to include Saturn Ions and three other small cars.

General Motors then added three more vehicles to the recall list March 17, bringing the total number of recalled cars to 1.3 million.

That number again climbed Friday to 2.6 million when GM took the unprecedented step of recalling all model years of the affected vehicles. Those cars may have been repaired with defective ignition switches before the recall, the company said.

“We are taking no chances with safety,” Barra said Friday in a statement. “Trying to locate several thousand switches in a population of 2.2 million vehicles and distributed to thousands of retailers isn’t practical. Out of an abundance of caution, we are recalling the rest of the model years.”

According to House investigators, the company knew the ignition switch was not up to specification in 2002 but continued with production anyway. The subcommittee also charges the National Highway Traffic Safety Administration, which regulates auto safety, knew about the problem in 2007 but failed to investigate.

Jessica Caldwell, senior analyst at Edmunds.com, said the early handling of the situation reflects a different culture at the company, before its bankruptcy and restructuring in 2009.

At the hearing, Barra will have to communicate that the company has changed in the past decade, Caldwell said.

“Probably the most-important piece for Congress and for the American public is what is being done to change the process,” she said. “What are those changes that are in place now?”

So far, Barra has asked former U.S. Attorney Anton Valukas to conduct a “thorough and unimpeded investigation,” and she last month appointed Jeff Boyer as the company’s vice president for global vehicle safety to identify and resolve safety issues.

GM has since vowed to take a more-proactive approach in dealing with product safety.

The company on Friday ordered dealers to stop selling its popular 2013 and 2014 model year Lordstown-built Chevrolet Cruzes, equipped with 1.4-liter, turbo-charged gasoline engines. Over the weekend, GM recalled about 172,000 of those vehicles to fix a right front axle half-shaft that can break and separate from the car without warning.

An additional 500,000 pickup trucks and sport utility vehicles were recalled to fix an oil-cooler line that could cause transmission oil to leak, potentially leading to a fire.

Monday’s recall included 1.3 million cars that could suddenly lose electronic power-steering assist.

Although the vehicles will revert to manual steering, drivers would have to exert greater effort to maintain control at lower speeds, increasing the risk of crashing, the company said in a statement.

Analysts generally saw the latest moves as a positive step going into today’s hearing.

“They’re being very cautious about what’s happening,” Caldwell says, adding that the moves demonstrate the company is changing its culture.

GM says it plans to pay up to $750 million for recall-related repairs. It was previously announced that $300 million of that charge would cover safety repairs from earlier recalls.


Comments

1handymandave(552 comments)posted 8 months, 4 weeks ago

There's going to be a huge contest in Washington when she testifies. Who will be able to tell a more believable lies, her or the President Obama.

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2NilesOhio(766 comments)posted 8 months, 4 weeks ago

As with any recall, cost is a major factor. The switch itself is relatively cheap, but unless things have changed, replacing an ignition switch is a very costly process since it involves the dismantling the steering column. Anyone who has done this knows it's not a quick task, and with potentially over a million cars to fix - they're talking tens or hundreds of millions of dollars in labor alone.

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3Silence_Dogood(1388 comments)posted 8 months, 4 weeks ago

Junk

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4IslandMike(757 comments)posted 8 months, 3 weeks ago

The stock is holding up well and GM sales are strong. The market is doing well and the S&P closed at a record high.
Thank you President Obama!!

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5Silence_Dogood(1388 comments)posted 8 months, 3 weeks ago

The cost for a replacement part for the defective unit was and still is 57 cents. This piece of crap company let thirteen people DIE over 57 cents per car. And this company wonders why people think their products are junk. Only an idiot would buy something from a company that has so little regard for the people that buy from them.

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6Silence_Dogood(1388 comments)posted 8 months, 3 weeks ago

IslandMike you forgot something,
Those thirteen people (mostly young teenage girls) are STILL DEAD.

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7IslandMike(757 comments)posted 8 months, 3 weeks ago

I didn't do it.

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8IslandMike(757 comments)posted 8 months, 3 weeks ago

Silence,
110,000 died in Iraq.

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9JoeFromHubbard(1134 comments)posted 8 months, 3 weeks ago

This has become more of a media event every day.

Auto manufacturers have had to deal with faulty design/component problems since the beginning.

This will be resolved and another issue will emerge. That's life.

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10Silence_Dogood(1388 comments)posted 8 months, 3 weeks ago

IslandMike what does Iraq have to do with GM. Or in your OCD world is it possible that Bush designed that defective switch with the intent to kill teenage girls. That is what you are implying by your reference to Iraq I quess, it can be hard to read a confused mind after all.

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11IslandMike(757 comments)posted 8 months, 3 weeks ago

Obama didn't design the switch either.

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12Silence_Dogood(1388 comments)posted 8 months, 3 weeks ago

IslandMike don't forget to take your med's today.

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13IslandMike(757 comments)posted 8 months, 3 weeks ago

Silence,
Your just another sore loser republican who does nothing but CRY because you didn't get Mitt Flopper elected. You and the majority of your party is filled with nothing but ANGER and HATRED. SAD.

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14lumper(284 comments)posted 8 months, 3 weeks ago

going to end up like bp gulf debacle. corporate liability with individual criminal charges.

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15INTEL(62 comments)posted 8 months, 3 weeks ago

GM designs something and sends it to a sub contractor.. with that said.. it does not make it a bad design... maybe some of the material was not to specs that this was cast in... (the aluminumn housings) and from just looking at them to a perfectly good assembly.. you cannot tell the difference in them... but through use and time... it takes tole on the part and things happen ... not making excuses .. but sometimes a company contracts put parts... and expects the sub contractor to do their job... but in todays world.. and with bringing in programs like NAFTA ... some things are made in this country and shipped here and other things are brought from somewhere else and is assembled.. I think GM is getting a bad wrap on some of this... but in the end they are responsible because it was used on their automobiles and products. IF it happened to them it will surely affect the other auto manufactures also.. just a matter of time...since that supplier fed all the auto makers...at one time or the other.. GM is doing their part to make things right..

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16Silence_Dogood(1388 comments)posted 8 months, 3 weeks ago

Simpleton Mike this story is about GM and it's intended use for over ten years of a known defective switch, what part of that don't you get you simpleton village idiot.

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17Silence_Dogood(1388 comments)posted 8 months, 3 weeks ago

No man is an island mike,
Entire of itself,
Every man is a piece of the continent,
A part of the main.
If a clod be washed away by the sea,
Europe is the less.
As well as if a promontory were.
As well as if a manor of thy friend's
Or of thine own were:
Any teenage girl's death diminishes me,
Because I am involved in mankind,
And therefore never send to know for whom the bell tolls;
It tolls for thee.

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18ctsv(1 comment)posted 8 months, 3 weeks ago

This was obviously an engineering defect made years ago during the Rick Wagoner years so I'm sure Mrs. Barra won't have many answers unless she knew about it then. GM, being the profit earner it has been for the last few years, should step up and pay the families who lost members do to this, Lord knows they have the money to do so after raking in billions in profits and paying hundreds of millions in profit sharing to their employees for the last few years. Step up to the plate.

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19IslandMike(757 comments)posted 8 months, 3 weeks ago

Under the law, GM is NOT liable for anything that happened prior to its bankruptcy filings. This should make all republicans very happy, because, "corporations are people my friend."
They admitted fault, but will have a legal obligation to pay ZERO. The congressional hearings are a bunch of smoke and mirrors, the new CEO isn't being thrown under a bus, she isn't even being thrown under a Chevy Cruze.
As for you DogBreath, what you're referring to is censorship, but what less should we expect from a commie? I'm glad that Obama beat the clown who favors legislation like this that protects these corporate fat cats.I love ObamaCare!!!

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20Silence_Dogood(1388 comments)posted 8 months, 3 weeks ago

IslandMike in as much as the liability of GM is concerned, GM knew of these issues before filling for bankruptcy. GM failed to notify the courts of this issue thereby committing fraud upon the court. No surprise there GM trying to pull a fast one over on the courts. Any Lawyer worth their salt will have no trouble proving that GM lied to the Court just like it lied to the American people. Guess what village idiot, when you fail to disclose during a bankruptcy hearing you are still liable. GM will pay thru its teeth, and rightly so.
p.s. don't forget to take your med's, you don't want those voices talking to you again.

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21IslandMike(757 comments)posted 8 months, 3 weeks ago

DogBreath, your out of your mind, they're obligated to pay NOTHING. They cleared bankruptcy and a good republican lawyer with a republican judge will see to it that they pay nothing. If they can get someone from FOX News to spin it for them the victims might end up paying. Funny thing is, GM sales are up!!
GM is ALIVE
Bin Laden is DEAD
Unemployment is DOWN
The stock market is UP
10 million additional people know have health insurance.
THANK YOU PRESIDENT OBAMA!!!!!

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22Robert_Neville(123 comments)posted 8 months, 3 weeks ago

I would like to make everyone aware that all the Auto makers in America and the World have the same parts. I want to bring this now to the United States and lets leave the World out of this.

GM is not the only auto company that has problems or recalls on there products. They are still a great car even some congressman making comments about Foreign Automobiles being safer it makes me want to educate them. I feel that if you are a person in power you should never fault someone because you have three finger pointing back at yourself. This is the facts for most of these Congressman that are in power now. They are making the money of this shipping jobs to China and to ends of the global. So, below are the recall numbers and the facts.

This is a link to all the million car recalled products for Toyota below(this is United States only):

http://toyotanews.pressroom.toyota.co...

This is a link to all the million car recalled products for Nissan below(this is United States only to include the Leaf):

http://www.reuters.com/article/2014/0...
and the auto site that talks about them in months and months ago.
http://www.autoblog.com/nissan/recalls/
please note nothing on there Nissan US page. (Bad news is not good for business)

The point that I am making is that every car has a recall but the foreign auto makers do not have to report to the United States Government. This is a true fact it states it on Toyota page. in small print under recall.

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23Silence_Dogood(1388 comments)posted 8 months, 3 weeks ago

Kelly Erin Ruddy, 21, of West Scranton, died Sunday from injuries sustained in an automobile accident.

Born in Scranton, daughter of Leo and Mary Theresa O'Malley Ruddy, Scranton, she was educated in Scranton schools and was a 2006 graduate of West Scranton High School. She was currently a senior at Marywood University, majoring in social work. She interned at the Green Ridge Health Care Center, Scranton. She was a work-study student at the Learning Resource Center, library services, at Marywood University, working with her mother.

While a student at Charles Sumner Elementary School, she became a Daisy, Brownie and Girl Scout. She was very athletic, playing softball at the Oxford Plot and basketball at the West Scranton Intermediate School, Holy Cross Hall and St. Ann's Lyceum. She practiced karate Sinco Ryu, Japanese-style. She was a member of St. Patrick's Church, West Scranton, and a committee member for the Paul "Hook" O'Malley Race Against Cancer. She also volunteered for the Women's Resource Center. She had a delightful sense of humor and enjoyed performing stand-up comedy in local comedy clubs.

She was preceded in death by her best friend and beloved sister, Tara Lee Ruddy, on Aug. 20. It is a comfort to her family and friends that she is now with her sister, Tara. As parents, we are grateful and blessed to have had the privilege of being the parents of such exceptional, intelligent, beautiful, glimmering daughters, who now reside in heaven as angels.

Kelly was kind, loving and considerate, valuing all living beings. She brought home a stray cat she found on the street, naming him affectionately "Big Papa." She loved her pet collie, Boomer, who slept with her every night. She will be missed by her numerous pets, includ- ing a lop-eared rabbit named Willis.

Also surviving are maternal grandmother, Ann Marie DeBuvitz O'Malley, Scranton; paternal grandparents, Robert and Rose Curmaci Ruddy, Clarks Summit; uncles and aunts, Patrick O'Malley and wife, Christine, Scranton; Matthew O'Malley and wife, Gail, Scranton; Rose Marie Shreck, Scranton; Vince Vance and wife, Ann, Clarks Green; Dr. Jay Clymer and wife, Elizabeth, Clarks Summit; and numerous cousins. She will be sadly missed by her best friend, Carly Macciocco.

In addition to her sister, Tara, she was preceded in death by her maternal grandfather, Paul "Hook" O'Malley; an aunt, Margie Holodnak Davis; and an uncle, Paul O'Malley.

A Mass of Christian Burial will be celebrated Saturday at 10 a.m. in St. Patrick's Church, Jackson Street, West Scranton.

Entombment, Cathedral Cemetery Mausoleum.

As per Kelly's request, there will be no hours of visitation.

In lieu of flowers, memorial contributions may be made to the Paul "Hook" O'Malley Race Against Cancer Fund, c/o 1810 Academy St., Scranton, PA 18504.

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