The man who did an internal probe of the GM ignition switch fault was asked by a U.S. congressional committee today to defend his decision that there was no coverup.
In his report made public June 5, former U.S. attorney Anton Valukas found a pattern of management deficiency and misjudgment that led to safety problems being ignored for years, but said there was no conspiracy by the corporation to cover up the facts.
Testifying Wednesday before the congressional committee, Valukas said he believed a “coverup” was when an individual knew the company had a safety issue and took steps to conceal it from other people.
“We did not find that,” he said.
GM has said at least 13 people died when the ignition on their car fell out of the run position as they were driving and the cars became difficult to steer. Airbags also failed to deploy because the ignition was off.
Valukas agreed GM engineers knew of problems with the ignition switch as early as 2006, but believed it was temporary inconvenience for customers and could be fixed by removing heavy items from a keyring.
"They were treating this as a customer convenience issue, instead of a safety issue," he said.
Diana DeGette, a Colorado Democrat, wondered how GM could find the stalling of vehicles was an inconvenience rather than a safety issue and wondered why the report did not go further.
"It does not fully explain why stalling was not considered a safety issue within GM. And most troubling, the report does not fully explain how this dysfunctional company culture took root and persisted," DeGette said.
Panel members also questioned Valukas on his conclusions that a lone engineer, Ray DeGiorgio, was able to approve the use of a switch that didn't meet company specifications, and years later, to order a change to that switch without anyone else at GM being aware of it.
Handling of ignition switch part
Valukas said the ignition switch DeGiorgio moved into production did not meet GM specifications and it appeared he did not explain the change to more senior management, denying that there had been a change in the part when GM began its own safety probe.
He was questioned repeatedly on the process that led to a 57-cent part failing and leading to the deaths of drivers over a 10-year record.
Valukas said he believed GM was transparent in allowing access to internal documents on the part, but that he did not have access to documents from Delphi, the parts maker.
In her opening reports to the congressional committee, General Motors CEO Mary Barra repeatedly stressed that GM is a changed organization, as families of victims of Cobalt crashes posted pictures of their loved ones on the wall of the room.
However, legislators complained that names of victims of the Cobalt ignition switch safety fault were blacked out in the report.
GM has said the number of people who died as a result of the safety issue is 13, though families have put other names forward.
Barra agrees GM has 'responsibility'
Barra began her presentation by expressing her sympathy to victims, saying, "I am ever mindful that we have a special responsibility to them, and the best way to fulfil that responsibility is to fix this problem by putting in place the needed changes to prevent this from ever happening again."
She assured members of Congress that the culture at GM is changing, pointing to the firing of 15 people and the implementation of a new safety system with reporting to top levels of management.
She said Valukas’s report was “deeply troubling” and “paints a picture of an organization that failed to handle a complex safety situation in a responsible way.”
GM has hired Ken Feinberg to determine who should receive compensation from GM for the ignition switch fault and how much they should receive.
A well-known lawyer, Feinberg was involved in compensation claims tied to the BP oil spill and other big cases where compensation was involved.
Barra confirmed that Feinberg won’t deal with people who were not killed, were not seriously injured or who want compensation because the value of their car was degraded.
She was asked why GM lawyers had gone to court, seeking immunity from damage claims because of its bankruptcy.
Barra assured Congress of Feinberg’s independence and said GM "wants to do the right thing" by compensating everyone hurt by the ignition fault, including vctims from before GM’s 2009 bankruptcy.
“I can assure you that I want anyone who died or was seriously injured as result of the Cobalt safety program will be part of this program,” she said.
Congressional members questioned whether GM has come to grips with its safety issues, questioning whether there was a more robust method of testing parts and how safety management would improve in the future.
20 million recalls
About 2.6 million cars were recalled over the switch issue, and Barra said all would be fixed by October. Another 20 million vehicles have been recalled for other faults in the period since January of this year.
Lawmakers sought reassurances that GM will act faster in the future, and provided evidence that the Cobalt recall wasn't the only one where GM was slow to take action.
Rep. Fred Upton read a 2005 e-mail from a GM employee who was driving a 2006 Chevrolet Impala that stalled because the ignition switch unexpectedly slipped out of the "run" position. The employee suggested a "big recall" should be conducted and recommended that the part be made stronger. But the 2006 Impala wasn't recalled for the problem until this week.
Upton asked Barra what GM would do with such an e-mail if it was sent today. The CEO said if GM determined the stalling happened because of a problem with a car part, "then we'll take immediate action." She said this week's recall of 3.4 million large cars was an example of how the company now reacts.