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From Products Liability Law Daily, June 19, 2014

GM, Valukas face congressional scrutiny following ignition switch defect investigation report

By Pamela C. Maloney, J.D.

Demanding to know not just how it happened but why it happened, Rep. Tim Murphy (R-Pa.), Chairman of the Oversight and Investigations Subcommittee of the House Energy and Commerce Committee, told General Motors CEO Mary Barraand former U.S. Attorney Anton Valukas of Jenner & Block, who led the automaker’s internal investigation, that there are no easy fixes for the kinds of systemic, cultural breakdowns and fundamental misunderstandings that permitted GM engineers not to suspect a safety problem. The subcommittee continued its hearings into the GM ignition switch recall on June 18. Rep. Fred Upton (R-Mich.), Chairman of the House Energy and Commerce Committee, spoke more harshly, describing the Valukas report as “deplorable, disturbing, and downright devastating.”

In a Memorandum prepared by the Majority Staff prior to the hearing, the questions raised by Members of the Committee during Ms. Barra’s earlier testimony before the Subcommittee (Products Liability Law Daily, April 1, 2014), were answered based on the findings disclosed in the Valukas report, with the added caution that these questions would be pursued further during the hearing. The Memorandum outlined the steps taken by GM in the wake of the report, and noted that the Chervolet Cobalt ignition switch recall had prompted GM to initiate a wave of other recalls, a fact highlighted by Ms. Barra in her address to GM employees (see Barra’s statement below). Since January, the company has announced 38 separate recalls, totaling more than 14.4 million vehicles, including a June 13 recall of “current generation” Chevrolet Camaros, totaling 464,712 vehicles (Products Liability Law Daily, June 16, 2014).

Despite the report’s answers to the questions posed during the Committee’s initial hearing, both Murphy and Upton confessed to still having questions about whether GM employees knowingly had withheld information during previous liability lawsuits. The congressmen also expressed concern over the engineering and legal failings at GM that lead to the company’s failure to have discovered the connection between the ignition switch defect and the airbag malfunctions that apparently led to so many deaths. The congressmen vowed to delve deeper into those issues as the House investigation into this matter continues.

In addition, Murphy and Upton pointed to the most recent GM recall announced on June 16 (Products Liability Law Daily, June 17, 2014), which identified a new set of vehicles with the same kind of torque problem that plagued the Cobalt for ten years as an example of how far-reaching this ignition switch defect issue extends.

Barra’s statement. Barra reported to the subcommittee that, as promised during her April 1 testimony, GM conducted a “comprehensive and transparent” investigation into the causes of the ignition switch problem and shared the findings with Congress, the National Highway Traffic Safety Administration, and the court overseeing the lawsuits filed against GM over the problem. In addition, Barra said that the company has identified and held accountable those individuals identified in the report as responsible for the safety failures and has made substantive changes in its approach to recalls. Finally, Barra said that GM has engaged former September 11th Victim Compensation Fund Special Master Kenneth R. Feinberg to develop a program for compensating the families who have lost loved ones and those who have suffered serious physical injury.

Barra also summarized her June 15 address to 1,200 employees at GM’s Vehicle Engineering Center (Products Liability Daily, June 15, 2014), emphasizing her admonition to the team that “the series of questionable actions and inactions uncovered in the investigation were inexcusable.” Barra assured the subcommittee that she has committed the company to act on all of the recommendations made in the Valukas report. Acknowledging that some of the committee members have expressed doubt about her commitment to solve the “deep underlying cultural problems uncovered in [the] report, ” Barra promised that she “will not rest until these problems are resolved.”

Valukas’ statement. Anton Valukas assured the committee that he had been given unfettered access to GM witness and documents and that, in the report, he did not simply repeat what any individual GM employee had told investigators. All employee assertions were tested against the extensive documentary record that was gathered and against statements made by other witness, Valukas said, adding that the report’s conclusion was that the Cobalt problems were one of a series of individual and organizational failures that led to devastating consequences.

During the decade that it took GM to recall the Cobalt, there was a “lack of accountability, a lack of urgency, and a failure of company personnel charged with ensuring the safety of the company’s vehicles to understand how GM’s cars were designed,” Valukas highlighted just a few of the report’s broad conclusions that tied directly to its recommendations and concluded his statement by enumerating several questions left open by the report including who (government officials and, perhaps, judges and juries) will assess the credibility of witnesses and whether there was civil or criminal culpability; what decisions GM will have to make about how to ensure that this never happens again; and who (the courts or Mr. Feinberg) will make decisions about which specific accidents were caused by the Cobalt's faulty ignition switch.

Companies: General Motors Co.

MainStory: TopStory MotorVehiclesNews MotorEquipmentNews

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