Transcript: Sen. Dean Heller’s Q&A with GM CEO Mary Barra on the ignition switch recall

Partial transcript of Sen. Dean Heller’s (R-Nevada) Q&A with General Motors CEO Mary Barra on “Examining the GM Recall and NHTSA’s Defect Investigation Process”. The U.S. Senate Committee on Commerce, Science, and Transportation’s Subcommittee on Consumer Protection, Product Safety, and Insurance’s hearing was held on April 2, 2014:

Sen. Dean Heller (R-Nevada):
Ms. Barra, the public is very skeptical of General Motors, and let me explain what they’re saying.

At some point during the last decade, GM knew that there was a problem with the faulty ignition switch, which led to the death of 13 people.

In late 2006 or early 2007, GM replaced the ignition part but kept the same part number and did not tell anyone.

Shortly thereafter, GM needed U.S. taxpayer loan to bail them out. The company was provided so much assistance that when they emerged from bankruptcy, the federal government in 2009 owned 60% of the company.

So from where I sit, it looks like GM was not forthcoming with the American people who bailed them out. It looks like there were multiple moments where the company had conflicts of interests either with initiating a recall at a time when GM was not financially sound or when the government owned 60% of the company.

So what I’m going to do is to allow you to explain yourself to the American people, and I think we need to know whether you believe the company acted in the best interest of the consumers who bought your cars and the U.S. taxpayers who bailed you out?

Mary Barra, CEO of General Motors:
First of all, I agree it took way too long for this to come to the attention and to do the recall, and we’ve admitted that. We’ve also apologized. It is tragic that there has been lives lost and lives impacted with this event.

From the part number perspective, I find it completely unacceptable that a part would be changed without a part number – the actual identifier being changed. That is not a process of good engineering. That is not an acceptable process. It wasn’t then, and it clearly isn’t now. And as we do our investigation, we will deal with that situation because that is not acceptable for good engineering principles.

But as I look at the culture of the company during the time frame, this part was designed in the late ’90s. It went into vehicles that went into production in ’03, the latest of which went out of production in the ’11 time frame. The culture of the company at that time had more of a cost culture focus.

And I can tell you we have done several things since the bankruptcy to create a new culture at General Motors, to be focused on the customer, starting with re-writing our values. The first value is the customers’ are our compass. The second is relationship matters and individual excellence.

We have also taken quite a bit of bureaucracy out of the vehicle development process at the structure itself. We’ve dramatically improved our quality organization and our customer experience organization. So there’s been dramatic improvements made in General Motors since that time.

Sen. Dean Heller (R-Nevada):
Ms. Barra, I’ve heard – I’ve read the transcripts from yesterday’s hearing. You’ve said most of this when you were on the other side of the Capitol. And you said that safety comes first at GM, that you don’t look at costs. GM looks at the speed at which it can fix it. And you said that there was a change – that GM has gone from a cost culture to a safety culture. I want you to explain that, and in explaining that does that mean that 2006 General Motors was more concerned with the bottom line as opposed to recalling their vehicles?

Mary Barra, CEO of General Motors:
When we look at – when the complete investigation is done, there was documents produced yesterday that if those are in complete context that they valued costs over quality once we knew there was a safety defect, that is unacceptable. In today’s culture, we don’t condone that, and it starts with leadership – myself, our leadership in product development, and across the company. If there is a safety defect, there is not a calculation done on business case or costs. It’s how quickly can we get the repair and put the right part or fix or inspection or whatever needs to be done to make sure the vehicles are safe that our customers are driving.

Sen. Dean Heller (R-Nevada):
So let me ask you again, if safety was not the highest priority in the past, is it fair to assume that GM only acts in the best interests of GM at all times? Was that true in 2006?

Mary Barra, CEO of General Motors:
Again, that’s a very broad statement. I would say that there’s been times in the past where there’s been a safety focus. General Motors is a 100 year old company. I can tell you now from post-bankruptcy there is a focus on the customer and on safety and on quality.

Sen. Dean Heller (R-Nevada):
…You’ve answered most of the questions with the response that there’s an ongoing investigation. You want to see the results of that. Do you have a target date for when that review will be complete?

Mary Barra, CEO of General Motors:
I hope to have that done within 45 to 60 days.

Sen. Dean Heller (R-Nevada):
45 to 60 days. I think that’s important for us to know.

Mary Barra, CEO of General Motors:
And I’ve asked Mr. Valukas to go as quickly as he possibly can but not sacrifice accuracy for speed.

Sen. Dean Heller (R-Nevada):
What opportunities will we have to review that?

Mary Barra, CEO of General Motors:
As I said before, any information related to safety – anything related to this incident, anything we think would help from a NHTSA, broader – we will provide it. Anything related – the only thing we won’t is issues of competitiveness or if there’s privacy issues we have to comply.

Sen. Dean Heller (R-Nevada):
How broad will this review be?

Mary Barra, CEO of General Motors:
I’ve asked Mr. Valukas – there’s no boundaries. There are no sacred cows. I want to make sure we have a complete understanding because only with a complete understanding can we make all the changes we need to make from both a people and a process perspective.

Sen. Dean Heller (R-Nevada):
Is Delphi a vendor? Or a subsidiary?

Mary Barra, CEO of General Motors:
Delphi is a supplier, not a subsidiary.

Sen. Dean Heller (R-Nevada):
Okay. Will this overview include looking at Delphi and their participation in this?

Mary Barra, CEO of General Motors:
To the extent that Mr. Valukas goes in that direction and we get that information from them, yes.

Sen. Dean Heller (R-Nevada):
I think it would make some sense to talk to people at Delphi and find out in their words and perhaps bring them to this committee, to find out what their understanding and – you know, they’re involved in this particular case.

Can you tell us whether or not this is a one-time occurrence?

Mary Barra, CEO of General Motors:
This is – as I look at it, I see it as a very extraordinary situation. There have been many, many cases where we’ve been quick to act from a safety recall process. And as I’ve mentioned before, often we are known to do more recalls of smaller population because we want to get to issues as quickly as we can.

Sen. Dean Heller (R-Nevada):
So you have no recall of whether or not a similar situation has occurred in the past where a part – two different parts have the same part number?

Mary Barra, CEO of General Motors:
I’m not aware of that. That is bad engineering.

Sen. Dean Heller (R-Nevada):
Do you think it was an oversight on Delphi?

Mary Barra, CEO of General Motors:
I don’t know and that’s what I hope to learn with the investigation. I want to understand all the parties involved, and what they did, what was wrong, what was not following process, et cetera.

Sen. Dean Heller (R-Nevada):
What would you consider the financial stability of GM in 2005, 2006, and 2007 just before the taxpayers bailed them out?

Mary Barra, CEO of General Motors:
Poor.

Sen. Dean Heller (R-Nevada):
What do you would have been the damage done to the public image if a company initiated a recall of these cars in 2005?

Mary Barra, CEO of General Motors:
I can’t – you know, I can’t guess what that would have been. Obviously, it would have been less than it is now and it would have been much better to have this issue resolved because it clearly took too long.

Sen. Dean Heller (R-Nevada):
Do you think GM would have survived if they had recalled cars in 2005?

Mary Barra, CEO of General Motors:
I can’t guess.

Sen. Dean Heller (R-Nevada):
Do you think the company took that into consideration?

Mary Barra, CEO of General Motors:
I did not take that into consideration and know of no one who did.

Sen. Dean Heller (R-Nevada):
That perhaps GM would have gone under had they initiated a recall in 2005?

Mary Barra, CEO of General Motors:
I don’t know.

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