Lawmakers demanded General Motors fire its chief lawyer and do more to help crash victims as a Senate subcommittee delved deeper into GM’s mishandling of the recall of small cars with defective ignition switches.
Thursday’s grilling was GM’s fourth appearance before Congress, but senators aren’t done with their investigation. Sen. Claire McCaskill, D-Mo., who chairs the subcommittee, said she will hold a hearing in the next few weeks to ask government safety regulators about their role in the recall.
GM has admitted that it knew about the faulty switches for more than a decade before recalling the cars. The ignition switches can slip out of the “run” position, causing the engines to stall and shutting off power to the air bags. It took years for GM engineers to connect the switch problem to the failure of the air bags to deploy.
GM recalled 2.6 million small cars beginning in February. That recall prompted an unprecedented safety review within the company, which has since issued 54 recalls for 29 million vehicles.
McCaskill praised GM CEO Mary Barra, saying she has “confronted the problem head on and the corporate culture that caused it.”
But McCaskill also put Barra on the spot, telling the CEO she should have fired GM’s corporate counsel, Michael Millikin, based on the conclusions of an internal report by outside attorney Anton Valukas. Barra, with Millikin sitting beside her, defended him as a man of “tremendously high integrity.”
Sen. Richard Blumenthal, D-Conn., said GM needs to be more transparent and assume more responsibility. He called for the public release of all of the documents given to Valukas and the unsealing of previous lawsuit settlements. He also asked if GM will waive the legal shield that protects it from lawsuits related to crashes that happened before its July 2009 bankruptcy.
In each case, Millikin said no.
The Valukas report found that GM’s legal staff, which began getting reports of air bags failing to deploy in Chevrolet Cobalts and Saturn Ions in late 2005, acted without a sense of urgency.
McCaskill said GM’s legal staff was warned four times by outside lawyers that it faced millions in punitive damages due to the switches. The warnings began in October 2010 and ended in April 2013. Millikin said the GM board was not informed of the potential legal liabilities.
Millikin also said the warnings weren’t reported to the U.S. Securities and Exchange Commission until after the recalls began earlier this year.
McCaskill, a former prosecutor, said she can’t understand why Millikin and one of his top deputies still are with GM.
“This is a either gross negligence or gross incompetence on the part of a lawyer,” she said. “I think the failure of this legal department is stunning.”
Millikin said he only learned about the ignition switch problems in February and acted quickly once he did.
Senators also focused on how GM failed to answer requests for information from the National Highway Traffic Safety Administration on fatal crashes. GM responded to the so-called “death inquiries” by asserting attorney-client privilege or saying it had not assessed the cause of a particular crash, said Sen. Barbara Boxer, D-Calif.
“I consider it a cover-up when a manufacturer does not respond fully and accurately to NHTSA,” Boxer told Millikin.
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