GM CEO Mary Barra non-committal on compensating victims of defective ignition switch

GM CEO Mary Barra. SOURCE:

General Motors CEO Mary Barra declined to tell Congress whether the automaker will compensate victims of the defective ignition switch, which has been linked to at least 13 deaths since 2005.

When Barra announced the hiring of Kenneth Feinberg, a prominent attorney who led the victims compensation efforts in 9/11, BP oil spill, and the Boston Marathon bombing, some lawmakers interpreted the move as an encouraging sign that the automotive company will recompense families of those who have been killed or seriously injured due to the faulty switch.

(So far GM has, in court, invoked a blanket shield on liabilities for vehicles produced prior to its bankruptcy in 2009.)

Read more: Timeline of General Motors ignition switch recall

But Barra’s testimony before the Senate Commerce Subcommittee on Consumer Protection, Product Safety and Insurance should give lawmakers – and victims – some pause on making optimistic assumptions about GM’s intentions.

During the April 2nd hearing, Barra was repeatedly asked by Democratic Senators whether GM will agree to compensate victims of the faulty ignition switches “regardless of whether or when GM went through bankruptcy”. Her responses were consistently non-committal.

“It’s open right now. [Feinberg] has guided us in the different things that we need to consider. Again, as I’ve said, we have civic and we have legal responsibilities. We are working on those,” said Barra.

Feinberg recommended that GM take about 60 days to “explore and look at all the different options”, according to Barra.

“We’ve not made any decisions yet. All options are still open, but I don’t have a decision to that,” she said.

“So do you think that these families should be able to be compensated regardless of the bankruptcy issue” Klobuchar pressed.

“That’s why we hired Mr. Feinberg to work through this issue,” Barra replied.

Sen. Richard Blumenthal (D-Connecticut) called on Barra and GM to “commit to a compensation fund that will do justice for the victims of the defects that killed people in your cars.” Blumenthal questioned why GM appears so reluctant to do the right thing.

“What is it that Ken Feinberg has to work through to convince you that there should be compensation to these victims?” asked Blumenthal. “Why not just come clean and say, ‘We’re going to do justice here. We’re going to do the right thing. We’re going to compensate the victims”, knowing that money can’t erase the pain or maybe even ease it but it’s the right thing to do?”

Unmoved by Blumenthal’s entreaty, Barra offered the same non-committal response: “Our first step in evaluating this is to hire Mr. Feinberg and we plan to work through it with him and understand his expertise. As I’ve said, there’s civic as well as legal responsibilities and we want to be balanced and make sure we are thoughtful in what we do.”

Barra’s statements suggest that GM is buying time to figure out whether the liability shield granted by the bankruptcy court would hold up.

Blumenthal insisted that GM’s liability shield should be struck down because the company deliberately concealed its prior knowledge of the defect from the bankruptcy court in 2009.

“I think it’s pretty much incontrovertible that GM knew about this lethal safety defect, failed to correct it, and failed to tell its customers about it, and then concealed it from the courts and the United States,” said Blumenthal.

Learn More:

Leave a Reply

Your email address will not be published.