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From Products Liability Law Daily, June 6, 2014

Congressional hearings announced in the wake of GM internal report

By Joe Bichl

Responding to an internal report commissioned by General Motors into the Cobalt ignition switch recall, House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Oversight and Investigations Subcommittee Chairman Tim Murphy (R-Pa.) announced plans for a hearing in the coming weeks to review the company’s findings with General Motors CEO Marry Barra. The committee also plans to meet with the author of the internal report, former U.S. Attorney Anton Valukas. In addition to the report, the company has provided the committee with over 500,000 pages of documents within the last week.

The Valukas report. The Valukas report, which was delivered to GM on Monday, June 2, and forwarded to federal regulators, uncovered a pattern of “incompetence and neglect” and “of management deficiencies and misjudgments—often based on incomplete data—that were passed off at the time as business as usual.”

Congressional reaction. Rep. Upton said in a committee news release that it will take time to “scrutinize” the 300 plus page report, but that the initial findings were “deeply disturbing,” and that “communications and management failures ran deep and wide within GM.”

“The failure to identify red flags and conduct a recall sooner cost lives,” Upton said. “It has been more than a decade since we put tough new standards in place so automakers and regulators could quickly spot patterns and fix safety risks, yet this devastating design flaw slipped through the cracks.”

Upton called GM’s behavior leading up to the recall “unacceptable,” but said the investigation was an important milestone. He urged GM and NHTSA to continue to cooperate and provide Congress with “honest answers as we work to determine what went wrong, if there are gaps in the law that allowed the system to fail, and what legislative remedies may be necessary.”

Rep. Murphy said that the committee has received approximately one million pages of documents from GM and another 15,000 from NHTSA.

“We will compare GM's findings to what we have already learned, and the subcommittee looks forward to hearing directly from Ms. Barra and Valukas. We must have a complete understanding to ensure a tragedy like this never happens again,” he said.

Consumer group response. Since mid-February, GM has recalled 2.6 million older-model Chevrolet Cobalts, Saturn Ions, and other small vehicles because a defective ignition can shut down the engine, which can disable the power steering, brakes, and air bags. GM has officially reported 13 fatalities resulting from the defect.

Ami Gadhia, senior policy counsel for Consumers Union, the public policy and advocacy division of Consumer Reports, said in a news release, “The report and the dismissals are the latest steps by GM to try to address this debacle, but there are still unanswered questions about how the company allowed these problems to persist for so long.”

She indicated that there are measures currently pending in Congress that would “crack down” on some of the problems that have surfaced as a result of the GM episode. One bill would require automakers to provide more information about deaths and injuries to NHTSA, while another would provide NHTSA the necessary budget for more inspections and oversight, as well as increase the penalties for manufacturers that violate federal safety standards.

“Today’s report is just the latest reason for Congress to move quickly on reforms that could prevent a tragedy like this from happening again,” she said.

Companies: General Motors; Consumers Union

MainStory: TopStory ProductRecallsNews MotorVehiclesNews NHTSANewsStory

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