action:article | category:NEWS02 | adString:NEWS02 | zoneID:39

Home » News » Business

April 02. 2014 9:20PM

Ayotte, Senate panel put pressure on GM chief at hearing


General Motors CEO Mary Barra testifies in Washington Wednesday. (Reuters)

WASHINGTON — General Motors CEO Mary Barra came under withering attack for her company's decade-long failure to deal with defective parts linked to fatal crashes, in a hearing where senators accused the company of "criminal" behavior and "a culture of cover-up."

Democratic and Republican senators, including some former prosecutors and state attorneys general, challenged Barra's assertion that GM had vastly improved its safety and management practices since emerging from bankruptcy.

Repeatedly, she was pressed to explain why GM redesigned faulty ignition switches in 2006 but did not change the identifying part number. That has raised questions about whether the company was trying to conceal the problem, after years of consumer complaints and at least 13 deaths linked to the faulty part.

"I believe this is criminal," said Republican Sen. Kelly Ayotte of New Hampshire. The Senate grilling was decidedly more emotional than the previous day's panel in a House of Representatives subcommittee, while Barra was calm and measured both days.

Seated behind Barra as the CEO responded to senators' questions, the parents of 21-year-old Kelly Erin Ruddy, who died in a 2010 accident in Pennsylvania while driving a 2005 Chevrolet Cobalt, held up photos of their daughter and the wrecked car.

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."

Barra testified that issuing a new part without new model or serial numbers was "completely unacceptable" and violates fundamental practices. "It's engineering principle 101 to change the part number when you make a change," she said.

Democratic Sen. Claire McCaskill chairs the Senate subcommittee on consumer protection and product safety that is investigating GM. The automaker is often thought of as two companies: the "Old GM" which bust and the "New GM" which emerged after its 2009 bankruptcy.

"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.

In testimony that lasted slightly less than two hours, Barra frustrated senators with her lack of answers to detailed questions about the failed switches. Barra repeatedly said she would wait for results of the company's ongoing internal probe.

"You don't know anything about anything," California Democratic Sen. Barbara Boxer quipped.

Barra kept calm, declining to say whether the death toll might rise and whether GM will create a compensation fund for victims and their families.

She also rebuffed demands that GM urge car owners to stop driving cars until they are repaired, saying the vehicles are safe if operated only with the ignition key and no other items hanging from key rings.

But she did tell the Wall Street Journal in an interview that going forward, company executives will be informed of vehicle safety problems when they first surface.

Top executives say they did not learn of the ignition-switch problem until January, 13 years after it was first noted.

Committees in the House and Senate are investigating why it took GM more than a decade to recall 2.6 million cars.

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.

When Connecticut Senator Richard Blumenthal asked Barra about her personal driving experience, the chief executive said she once suffered a loss of power steering and power braking.

"Pretty frightening?" he asked. "It's — it can be startling," she responded.

GM officials declined to provide details on the incident Barra described. She did not say what model she drove.

McCaskill said the "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.



 New Hampshire Events Calendar
    

    SHARE EVENTS FOR PUBLICATION, IT'S FREE!

Upcoming Events

 New Hampshire Business Directory

  

    ADD YOUR BUSINESS TODAY!