March 19, 2014
General Motors (GM) CEO Mary Barra said on Tuesday that GM didn't move fast enough on the ignition switch fault that triggered the recall of 1.62 million cars worldwide and is blamed for 12 deaths in 31 crashes.
As part of her plan to fix that, she announced a new permanent position of global safety chief, set a goal of fixing 100% of the recalled cars and said GM's internal probe of how faulty switches ended up on cars years after the fault was discovered will have "no sacred cows."
But Barra, in her first interview since the February recall, wouldn't promise that GM will accept responsibility for deaths, injuries and damage from before the government-supervised bankruptcy reorganization in 2009. That deal limited its exposure to pre-bankruptcy product liability and other claims. Nor did she commit GM to establishing a victims' fund.
At least one lawsuit is in the wings that aims to test GM's insulation from pre-bankruptcy injury, death and damage liability. GM remains responsible for warranty work on pre-2009 cars and trucks.
Once the recall is done and GM has repaired its own procedures to avoid overlooking such a flaw for so long again, Barra promised that "we will do what's right," without elaborating.
"Right now our focus is on the customers 100%" to "make sure we repair every single one of these vehicles," she said. The National Highway Traffic Safety Administration (NHTSA), which polices recalls, has set a 100% goal, as well, but it's likely unrealistic.
GM has said it averages roughly 80% of recalled vehicles showing up to get fixed—and that can take years to accomplish.
The new safety chief is veteran GM engineer Jeff Boyer, whose title is vice president, global vehicle safety. It's rare for a car company to have an executive with such a specific responsibility, and Barra promised he would have access to top executives and the board without red tape if he finds an urgent issue.
Mark Reuss, GM's global product chief, described Boyer as a "passionate safety zealot."
"It's unprecedented for someone having that kind of access," says Jack Nerad, a longtime industry observer and top analyst at KBB.com. "What I've seen the past couple of days at GM represents a turning of the page. I hope it's not just window dressing."
GM records show the ignition switch problem first was noticed in 2001 during development of the Saturn Ion, again in 2003 after it was supposed to have been fixed and then in 2004 during preproduction work on the then-new 2005 Chevrolet Cobalt.
"Clearly this took too long," Barra told a dozen reporters at GM headquarters here. "We will fix our process."
GM has hired Tony Valukas, chairman of the law firm, Jenner & Block and former U.S. Attorney who probed the Lehman Bros. collapse, to lead the internal investigation.
Barra noted that he "has 10 years of activity to go through" to untangle how and why decisions were made that let the faulty switch make it into production. "We won't sacrifice accuracy for speed," she said.
She said, "No one (has been) disciplined or fired at this time."
The lag between first signs of trouble with the switches and the recall has prompted ongoing investigations by NHTSA, the Department of Justice and two congressional committees.
Barra said "it's likely" she'll testify at those hearings, along with other GM executives.
She said dealers should be able to start replacing switches April 7 and be finished in October.
Barra and Reuss both said they'll re-emphasize to dealers that they should offer free loaner or rental cars to people nervous about driving their recalled cars before they are fixed. GM is paying for the interim cars, so dealers shouldn't object, Reuss said.
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