GM’s Federal Recall Hearings Will Kick Off with CEO Barra on April 1
Barely three months into her tenure as CEO of General Motors (NYSE:GM), Mary Barra will be testifying before a U.S. House of Representatives panel investigating the ignition problem that sparked a recall of 1.6 million vehicles and is tied to 12 deaths and numerous accidents. GM, the National Highway Traffic Safety Administration, and a House subcommittee are all initiating investigations of their own into why it appears General Motors took 13 years to respond to such a safety hazard.
Barra is likely to remain consistent with a video published on GM’s website earlier this week, in which she says ”something went wrong with our process” and “terrible things happened.” Government aides told Reuters the recall probes are a leading priority for the House Energy and Commerce Committee at the moment.
The House Energy and Commerce Committee will have broad powers to investigate the actions of General Motors and the National Highway Traffic Safety Administration, including the ability to subpoena witnesses and documents, Reuters reports. It has also invited NHTSA acting Administrator David Friedman to testify on April 1.
The committee is the same one that oversaw the investigation into Toyota’s now-infamous unintended acceleration issues. Perhaps as foreshadowing, the company was required to pay $1.2 billion in settlements this week. April’s session will likely be the first a series, Reuters says.
The heart of the issue revolves around why it took so long for General Motors to react to the problems. The issue, initially found in 2004 on a 2005 model-year car, was determined to have been noticed as early as 2001. Still, nothing was done about it until January, and by then, 12 confirmed deaths had occurred and as many as 300 lives may have been lost due to the ignition defect.
“The broad question the committee wants to answer is, ‘Is this a problem that could have been prevented or detected any earlier than it was?’” a House Energy and Commerce aide told Reuters. Further, five CEOs spent time at the helm of GM during the period of more than a decade since the ignition problem first appeared, the news service said, adding further complications to what was already going to be a complex investigation.
Michigan Rep. Fred Upton will be overseeing the federal investigation; Upton was also on the panel that probed the Ford and Firestone debacle of the early 2000s, so he’s had some experience with large-scale defects and recalls with deaths involved. Since those hearings, regulations have been tightened to help ensure those scenarios wouldn’t spring up again; they were made more restrictive after the Toyota problems.