General Motors CEO Mary Barra says a compensation program for victims of the Chevrolet Cobalt ignition-switch defect will carry no cap and suggests it may include more than the 13 fatalities the automaker has identified so far, but her third testimony before Congress on the safety scandal yields few other developments.
“I can assure you that I, and General Motors, want to make sure that anybody who was harmed as a result of the ignition-switch defect is a part of that program,” Barra says.
A key element of debate in the ignition-switch investigation has been the number of deaths and crashes GM attributes to the defect. Federal investigators have said it is “likely” responsible for more than 13 fatalities, and the family of at least one victim in a crash blamed on the ignition switch says GM does not count passengers killed or injured riding in the rear seats.
GM publicly has stuck with 13 deaths, although it has twice increased the number of crashes related to the ignition switch to 47.
Barra also declines to speculate on a dollar amount for the compensation program, but answers “No” to a question of whether the program will have a financial cap.
She says an independent study of the scope of the compensation program, conducted by attorney and victim’s compensation expert Kenneth Feinberg, will come within 14 days and reiterates the automaker will begin accepting applications for it on Aug. 1.
Anton Valukas, chairman of the law firm Jenner & Block, led an investigation of GM’s handling of the ignition-switch recall and joins Barra on Capitol Hill today. Valukas says his 300-page report recently released by GM shows no evidence that the automaker’s executives, engineers or legal team concealed evidence that might have exposed the defect earlier.
“In this instance, what we looked for was any evidence that any individuals knew they had a safety issue and took steps to conceal the fact,” Valukas says. “We did not find that.”
The former U.S. attorney says his definition of a cover-up does not include moving too slowly to recognize a safety risk exists, a key finding of the Valukas report. “I would not call that a cover-up,” he says.
Barra also tells Washington lawmakers the greatest challenge to fixing Cobalts and other GM small cars on the road with the ignition-switch problem is getting owners to bring their cars into dealers for service and says she personally will ensure safety plays a more visible role in executive compensation.
According to Barra, an estimated 400,000 ignition-switch replacement kits have been produced and shipped to dealers, who are extending business hours to accommodate Cobalt owners. A third production line for the kits starts this week, she adds, and GM has used innovative approaches such as engaging social media sites and using specialized language in recall notices to persuade customers to bring their affected vehicles to dealers for service.
Yet only 150,000 of the 2.6 million vehicles recalled worldwide have been fixed.
“The challenge is getting the customer to come in and get the vehicle repaired,” Barra says.
At the suggestion of Rep. Kathy Castor (D-FL), Barra says she will make company safety performance a more explicit element of executive compensation.
“I will commit to that,” she says. “I will make sure it’s explicit. It’s a good suggestion.”
The mood of Barra’s testimony today before the House Energy and Commerce Subcommittee on Oversight and Investigations takes a decidedly less confrontational tone than her previous appearance, when congressional members berated the 33-year GM veteran for putting the lives of Cobalt owners at risk for a decade before conducting the recall.
However, Barra does take heat for one element of her organizational restructuring in the wake of the scandal: Too many longtime GM insiders run safety at the automaker, says Rep. G.K. Butterfield (D-NC).
As part of Barra’s reorganization of its global engineering group, the automaker put Jeff Boyer, whose tenure at GM dates back 40 years, in charge of safety. GM hired 35 safety investigators to probe the automaker’s products for potential defects, but nearly all come from within the company.
“I would suggest you bring in some new blood,” Butterfield says.
