General Motors is going to great lengths to convince Congress and the American public that the company has changed its focus from costs to customers. GMs CEO, Mary Barra, wants consumers to believe that the new GM cares about its customers and is working to correct past mistakes.
In Ms. Barras testimony in front of Congress on Tuesday and Wednesday, however, GMs past continually overshadowed the conversation. Representatives from the House Energy and Commerce Committee asked Ms. Barra for details about what GM knew regarding the faulty ignition switches that are at the center of the latest vehicle recall.
Barra, who took over as GMs CEO in January, remained calm and told the committee that the events leading to GMs decision not to issue a vehicle recall were unacceptable and very disturbing. She also apologized to the families of victims who were killed or injured in accidents caused by the defective switches. However, Ms. Barra could not provide answers to many of the questions the committee had, stating that GM needed additional time to investigate.
In the past month, GM has recalled approximately 6.3 million vehicles worldwide for various problems. At the center of Congress inquiries are the allegations that GM was aware that the ignition switches in several models of cars, including the Chevrolet Cobalt and the Saturn Ion, were defective and could cause the engine to turn off while driving. This defect is responsible for at least 13 deaths and many more injuries.
Members of a House subcommittee analyzed GMs complaint database and found that at least 133 complaints were filed with GM documenting the problem. The complaints stated that the engine would turn off if the ignition switch was bumped, or if the vehicle was jarred by potholes or other obstacles. Additional testimony and evidence submitted to Congress suggested that GM had known about problems with the ignition switch for nearly a decade. GM eventually redesigned the ignition switch in 2006, but failed to issue a recall or otherwise alert consumers to the dangers posed by the faulty switch.
GM Plans Compensation for Victims
In response to the numerous claims and lawsuits initiated by victims injured by the defective ignition switch, GM has hired a well-known compensation attorney to oversee the victims compensation fund. This fund should compensate people who were injured in crashes or the families of loved ones who were killed.
GMs 2009 bankruptcy case could affect people who were injured by the defective switch. Any injuries or deaths which occurred before 2009 are part of the bankruptcy case, and GM has no obligation to pay these claims. Ms. Barra was hopeful, however, that GM may decide compensate these victims anyway as well as a gesture of goodwill.