April 1, 2014 at 9:32 pm

GM's Barra keeps cool under tough questions from Congress

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Washington — General Motors CEO Mary Barra faced rough questioning from a House committee Tuesday, taking responsibility for the company’s massive recall of 2.6 million cars for ignition switch failures, but dodging many questions about what went wrong.

Barra repeatedly pleaded for patience, saying she was awaiting results of an internal investigation being led by a former U.S. attorney. At one point, Rep. Diana DeGette, D-Colo., interrupted Barra, and referring to the company’s chronology of events said, “Time and time again, GM did nothing.”

In more than two hours of sometimes prickly questioning and opening statements, House committee members were mostly businesslike, but many expressed frustration with the lack of answers.

“We don’t trust the company right now,” said Rep. Gregg Harper, R-Miss. He disclosed a September 2005 GM email that said warranty savings would not be offset by the costs of improving the switch: It would cost 90 cents, but the warranty savings was just 10 cents to 15 cents. DeGette cited another document that the earlier fix could have been as little as 57 cents a switch.

“This analysis is inappropriate,” said Barra, who was named CEO in January. “It’s not acceptable to put a cost on a safety issue.”

Barra may have had a good reason not to answer some questions: GM faces an investigation by the Justice Department, and the company could be charged with misleading Congress if she gave a wrong answer. The government recently imposed a $1.2 billion criminal penalty on Toyota Motor Corp. for its sudden acceleration problems in 2009 and 2010; the Justice Department cited “inaccurate facts” given to Congress.

Barra will face more questioning Wednesday morning, this time by a Senate committee.

The most detailed answer she offered to the House committee when asked what went wrong is that GM, had “more of a cost culture” than a focus on consumers before its bankruptcy reorganization.

Rep. Marcia Blackburn, R-Tenn., asked if the switch issue was related to the government bailout. “Do you think there was a coverup or was this sloppy work?” she asked. Barra said the probe will answer both, declining to offer an opinion.

There were few emotional moments. “It came to light on my watch, so I am responsible,” said Barra, who took leadership of the company on Jan. 15.

At one point, Barra was asked if she agreed with a media account that the ignition-switch recall was one of the biggest safety crises in the company’s history. Barra repeated her talking points. Another member of Congress asked her to commit to turning over the final report from GM’s internal investigation. Instead Barra repeatedly said GM would turn over “what’s appropriate.”

Rep. Peter Welch, D-Vt., told Barra: “I’ve got to congratulate GM for doing the impossible: getting Democrats and Republicans to working together.”

Victims pay expert hired

Barra disclosed that GM has hired attorney Kenneth Feinberg, a noted victims’ compensation expert who has overseen funds for those harmed in the 9/11 attacks, Boston Marathon bombing and BP oil spill. She said the company has responsibilities, and Feinberg will help executives figure out what to do. GM wants to do “the right thing” and has a “moral responsibility” as well as legal one, she said.

The company could decide to compensate owners of vehicles involved in crashes before the company’s July 2009 bankruptcy filing, Barra said. GM has a liability shield for pre-July 2009 crashes. The top brass will meet with Feinberg Friday; he will spend 30-60 days advising GM on how it should proceed. But under questioning, Barra wouldn’t commit to creating a victims’ compensation fund, insisting Feinberg will help GM find “the best path forward.”

Sen. Richard Blumenthal, D-Conn., who has pushed for GM to set up a victim’s fund as large as $8 billion, said GM’s hiring of Feinberg is a first step in facing GM’s moral responsibility.

“Picking an expert is a positive sign, but no substitute for real action — and full, fair compensation for victims,” he said in a statement.

Barra repeatedly evaded specific questions, saying the company’s internal investigation would get to the bottom of problems. But she said early findings show units within GM didn’t share enough information with each other. Asked how GM today balances safety with cost, Barra said: “We don’t.”

Barra acknowledged that a new ignition switch redesigned in April 2006 should have had a new part number. She said she didn’t know who approved the decision to make a new part but not identify it as such: “That is an unacceptable practice. That is not how we do business.”

Rep. Joe Barton, R-Texas, a former engineer, didn’t understand why GM would buy parts that didn’t meet its specifications. GM’s supplier, Delphi Corp., told the committee that in 2002, GM agreed to buy ignition switches that didn’t meet its specifications — and even the redesigned parts in 2006 didn’t meet its specifications.

“There shouldn’t be a part used in any GM product or any other company that doesn’t meet specifications,” Barton said. “That’s not an acceptable answer to the American people.”

At one point, Barton said, “What you just answered is gobbledygook,” responding to her description of how the company may at times buy parts and materials that do not meet its own specifications.

Delphi had no comment Tuesday.

Won't 'sacrifice accuracy'

Barra told reporters during a brief session after the hearing that she “wouldn’t sacrifice accuracy for speed” in answering questions that she didn’t have the answers.

Asked by a reporter if she could have said more Tuesday, Barra replied: “I could not.”

Rep. Fred Upton, R-St. Joseph, said he would consider legislation to address auto safety issues. Rep. Henry Waxman, D-Calif., will re-introduce legislation that would require a $3 fee on new cars to fund enforcement, hike penalties to as much as $200 million for failing to recall vehicles in a timely fashion — up from $35 million — and give NHTSA authority to order unsafe vehicles off the road immediately.

Families of those killed in the now-recalled cars lined up long before the hearing started. They filed into the last three rows of the committee hearing, bearing photographs.

“We just want justice for our son,” said Nick Langley, of Phoenix. His 18-year-old stepson, Richard “Scotty” Bailey was killed in California in 2008 when his Chevy Cobalt crashed as he was returning to his Marine base in California.

dshepardson@detroitnews.com
Detroit News Staff Writer Marisa Schultz contributed.

General Motors CEO Mary Barra testifies before the House Energy and Commerce Committee for a hearing on the GM ignition switch recall on Capitol Hill in Washington, DC, Tuesday. / Jim Watson / AFP/Getty Images
General Motors CEO Mary Barra is sworn in on Capitol Hill in Washington ... (Evan Vucci / AP)