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

Partial transcript of Sen. Kelly Ayotte’s (R-New Hampshire) 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. Kelly Ayotte (R-New Hampshire):
…Ms. Barra, you described the situation with the duplicate parts, the duplicate ignition switches – one had the defect, one didn’t, however the same part number was kept. And as I understand that that happened – the part was actually approved by the chief engineer in 2006 and that it was the re-designed ignition switch was put at some point into the model during the 2007 year. And you’ve described that as an unacceptable practice.

You know, I have to say when I look at this situation, particularly the fact that there’s indications that GM may have known as soon as 2001 about the problems with the ignition switch, the fact that there would be two identical parts – in other words, one’s defective and one isn’t – and that you didn’t change the part number, strikes me as deception. And I think it goes beyond unacceptable. I believe this is criminal.

And I guess my question to you is have there been any other instances where GM actually is changing a part and fixing a defect and keeps the part number the same?

Because this to me is not a matter of acceptability; this is criminal deception.

Mary Barra, CEO of General Motors:
I am not aware of any, and it is not an appropriate practice to do. It is not acceptable. It is crucial. It is engineering principle 101 to change the part number when you make a change.

Sen. Kelly Ayotte (R-New Hampshire):
I think it just obviously was someone made the decision and it was approved by GM to do this, and I’d like to know whether it’s ever been done in any other instance because I think we should get to the bottom of that in terms of deception, in terms of the potential safety issues that can grow from that, of not triggering for people that there’s actually that’s being fixed but not with a different number. So it’s really a matter of being honest and truthful with the public here. So I’d like to get a follow up answer to that as this investigation goes forward because I don’t see this as anything but criminal when I see the change in this part number.

I also wanted to ask about – Chair asked you about the deposition in April and May of last year where clearly in the deposition the trial counsel had this issue of the two parts with the same number – one defective, one not. Does the general counsel report directly to the CEO?

Mary Barra, CEO of General Motors:
Yes.

Sen. Kelly Ayotte (R-New Hampshire):
And I find it shocking that something like that – and I share the chair’s concern – wouldn’t have gone directly up through the leadership of GM. And so I think this is a very important issue that we need to understand even a year ago what was told and who knew what, when. Because it seems to me – I’m a lawyer by background as well. This would have been shocking for me to hear in a deposition representing a client, and I would have gone to the top if I heard something like that to make sure that my client understood what was happening and the risks that they faced.

I also wanted to ask you about – with regard to the taxpayer bailout of GM in 2009. At that point, had there already been lawsuits filed related to the ignition switch?

Mary Barra, CEO of General Motors:
I can’t answer that question. I don’t know.

Sen. Kelly Ayotte (R-New Hampshire):
I would like to know whether GM actually notified the administration’s auto industry task force, which helped administer the taxpayer bailout, about the ignition switch. But I would assume that if there had been any lawsuits that had been filed that were pending with regard to the safety of the products of GM that this would have been something that would have been brought to the attention of the administration, and I would like to know what information was provided to that task force, other officials in administration as we provided taxpayer dollars to GM to address the bailout and the bankruptcy. So I think this is an important issue as well, and obviously an important issue for NHTSA as well. So if you could get to us on that, I would appreciate it.

Thank you.

Sen. Kelly Ayotte (R-New Hampshire):
As I understand it at this point, nobody within GM has been fired as a result of the issue that comes before us today on the ignition switch and obviously this long pattern of having information and not providing disclosure and recall to the public. Is that true – nobody yet has been fired?

Mary Barra, CEO of General Motors:
I think it’s important to do a complete investigation. But we will take the appropriate action. But yes, that’s true.

Sen. Kelly Ayotte (R-New Hampshire):
So one thing you’ve hired Mr. Valukas to conduct this internal investigation, and I assume GM is paying Mr. Valukas, correct?

Mary Barra, CEO of General Motors:
Correct.

Sen. Kelly Ayotte (R-New Hampshire):
Now, I’m aware of his qualifications and certainly I think that he’s a very qualified individual. However, it seems to me – how will you guarantee that basically all of the individuals who – or maybe not all of them; maybe some of them are no longer with the company but I think we can guess that many of the individuals who were involved in the decisions that led us to where we are today are still at GM or potentially could be at GM. And we already have the situation that the Chair mentioned with regard to the failure to disclose and the litigation documentation that was directly relevant to the litigation that showed the change in terms of the part and the failure to create a new number for the change in the defective ignition switch. And I guess I’m very concerned how are you as CEO going to guarantee that no documents are withheld from not only Mr. Valukas but also investigations that are being conducted by the government? And how are you going to ensure that given that the people that Mr. Valukas is going to be focused – I think many of them are going to be worried about their own future and liability – whether it’s civil or criminal liability – that you actually can get to the bottom of this with this internal investigation?

Mary Barra, CEO of General Motors:
Again, Mr. Valukas, I think, is very experienced in doing this. He has several decades worth of experience and has the highest integrity. I certainly know he is not going to compromise his reputation for General Motors. And I have confidence based on the fact that he’s done investigations in the past and we’ve acted – gotten to the truth by, you know, going to multiple sources to get to the truth. And we will act on it and we’ve demonstrated that we would up to and including discharging people.

Sen. Kelly Ayotte (R-New Hampshire):
And I have no doubt as I’ve said about Mr. Valukas’s qualifications. Have you already segregated all the document and put them aside that are related to this issue because – and evidence that you’re aware of now so that Mr. Valukas at least has that set aside because at the moment, you know, given the potential liability that we’re facing, it seems to me – and you’re potentially facing – that this is a very important issue to ensure that no one can interfere with that at this point.

Mary Barra, CEO of General Motors:
I agree with you it is a very important investigation, and that’s one of the reasons we only have one independent person doing that investigation, and there are I believe over 200 people who already have document litigation hold so we are doing everything that we can to make sure he has access to everything and anyone he wants.

Sen. Kelly Ayotte (R-New Hampshire):
So you have actually already set aside to ensure that these documents are preserved and anyone he needs access to he’s able to have access to.

Mary Barra, CEO of General Motors:
I will say anyone he wants access to he will have access to. When you use the term set aside – again, everybody has been placed that is remotely in connection on litigation hold so they cannot – the documents exist and they’re on notice they cannot do anything with their documents.

Sen. Kelly Ayotte (R-New Hampshire):
Well, it seems to me that they may be on notice that they can’t do anything to their documents, but I would hope that you as CEO would be making sure that it’s not just that you’re telling that to people but you actually are ensuring that these documents can’t be interfered with before he undertakes his investigation.

And my question to you would be when this investigation is conducted, I appreciate that you said that you’re willing to come back to the committee and we thank you for that. Will you make Mr. Valukas available to this committee?

Mary Barra, CEO of General Motors:
I think that would be Mr. Valukas’s option, not my decision to make for him.

Sen. Kelly Ayotte (R-New Hampshire):
Well, you’ve hired him and as far as I know when you hire someone to conduct an investigation because I’ve done it before as Attorney General of our state one of the terms that I want to work out up front is will you be willing to present the results of your investigation and to whom would you be willing to present them to. So you’ve not come to that agreement with him?

Mary Barra, CEO of General Motors:
I would share the results of the investigation. As I’ve already said, I would share with this committee, with Congress, with NHTSA, and with our employees and customers.

Sen. Kelly Ayotte (R-New Hampshire):
Well, I guess I think if you’re going to have confidence and you’ve said multiple times in this hearing that you’re confident with Mr. Valukas. I don’t question his credentials. He’s got exemplary credentials and it seems to me that we would want to hear – obviously appreciate your testimony as the CEO and certainly want to hear what steps you’re taking to address this issue – but I would think it would be important for this committee actually to hear directly from Mr. Valukas on the investigation himself and what the scope of his investigation was.

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