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GM boss faces more Senate grilling

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IOL mot pic jun18 Mary Barra

REUTERS

Latest session for Mary Barra in the congressional hot seat comes just days after GM recalled another three million vehicles that apparently suffered from a separate ignition defect. Picture: Kevin Lamarque

Washington DC - General Motors chief executive Mary Barra will return to Capitol Hill on Wednesday to face intense questioning about whether the company has a grip on the safety crisis that has enveloped it this year, as recalls connected to ignition-switch issues continue to grow.

GM has come under fire from the Justice Department, lawmakers and other authorities probing why it waited more than a decade to recall 2.6 million cars with an ignition-switch flaw that has been tied to at least 13 deaths.

Barra's latest turn in the congressional hot seat comes just days after GM recalled another three million vehicles that apparently suffered from a separate ignition defect.

GM has not tied any fatalities to that defect.

It has portrayed the additional recalls as the result of its review of all safety issues since the ignition-switch recalls were first announced in February.

But lawmakers last week immediately pounced on the mounting recalls as potential evidence of bigger safety problems at GM.

For the hearing on Wednesday, Energy and Commerce Committee chairman Fred Upton said he wanted “straight and honest answers” about what got the company into this mess and how GM would fix it.

“GM's work to restore drivers' confidence is far from over.”

General Motors has issued 44 recalls this year totaling about 20 million vehicles worldwide, which is more than total annual US vehicle sales. Of the recalls this year, nearly 6.5 million of the vehicles were recalled for ignition switch-related issues, including more than half a million Chevrolet Camaros on Friday.

The ignition-switch problems can cause the cars to stall and, because the cars were stalled, air bags failed to deploy in crashes - some of them fatal - and drivers had difficulty operating their vehicles because power steering and brake systems also malfunctioned.

Analysts said they are expecting lawmakers to give Barra rough treatment on Wednesday.

Industry analyst Michelle Krebs said: “I don't expect it to be a cakewalk. There will be more questions about how safe all GM’s cars are in light of all these recalls.”

GM plans to address the ignition switch issue in the three million cars recalled this week by replacing or modifying their keys to eliminate a slot in the end of the key. The slot allows a dangling key ring to slip to one side and pull the ignition key out of the ‘run’ position.

A spokesman said the ignition switches did not need to be replaced, even though they were “slightly” below the company specification for torque - the force needed to move the switch out of the ‘run’ position.

Sandy Munro, owner of a Detroit-area engineering consulting firm that does work for both automakers and the US government, said: “A better, if more costly solution would be to change the ignition system to a more robust design.”

Munro described the key fix as “cheap, quick and temporary.”

Barra, in her prepared testimony which was made public on Tuesday, said GM was addressing any and all safety concerns. She also said the company was committed to change.

“I want this terrible experience permanently etched in our collective memories. This is a tragic problem that never should have happened. And it must never happen again.”

Barra will appear with Anton Valukas, the GM-hired investigator who delivered a report earlier this month that spared top executives and pinned blame on lower-level engineers and lawyers.

The report said those employees either did not appreciate the danger of the flaw or did not share the risk with their superiors.

GM and Barra have so far weathered the scandal with few signs of permanent damage; domestic sales in May were up 12.6 percent from 2013.

Barclays Capital analyst Brian Johnson said he viewed the recently announced recalls as the result of a “deep-dive catch-up” on safety issues, including many minor ones.

He said Barra would need to show on Wednesday that GM was aggressively pursuing organisational and cultural changes.

“They need to communicate to Congress that they've done a thorough job, and to Wall Street that most of these major recalls are behind them.”

Reuters


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