Barra Returns To Face Congress Post-Valukas Report

In today’s digest: General Motors CEO Mary Barra returns to the Beltway with Anton Valukas in tow; GM is hit with a $10 billion lawsuit; affected families appear before Barra’s testimony; and a safety group calls the Valukas report “flawed.”

Automotive News reports Barra made good on her promise to return to Capitol Hill for a second round of Congressional hearings over the February 2014 ignition switch recall that has upended the automaker for the time being. During Wednesday’s hearing before the U.S. House Energy and Commerce Committee, she proclaimed any unexpected vehicle shutdown to now be considered a safety concern by the automaker, instead of waiting until a clear link surfaced on its own prior to action. The hearing also revealed just how much more work awaits GM in overhauling its corporate culture for the better of all, recounting a report made by an employee in 2005 about ignition switch issues in the 2006 Chevrolet Impala similar to those in the Cobalt. However, it would take until this week for a “big recall” of the mid-size sedan over the issue to occur due to the company’s widespread safety deficiencies.

Later in the hearing, former U.S. attorney Anton Valukas, hired by GM to conduct an independent internal investigation into the recall, took questions about his report. Valukas stated that while he had unfettered access to the automaker, getting through to supplier Delphi and trial lawyers leading cases against GM was easier said than done. Barra then had words about Ray DeGiorgio, the former GM engineer named repeatedly in the Valukas report for his approval of the original switch and its undocumented redesign. In short, she didn’t find DeGiorgio “credible” regarding his statements to Valukas’ team of investigators.

Finally, Barra addressed the issue of compensation for the families affected by the original recall, stating victim-compensation expert Kenneth Feinberg would have total control of the fund, and that GM will have no cap on compensation:

We want to capture every single person who suffered serious injury or lost a loved one — every single one. If the ignition switch was part of the issue, we want them in the program. We want to get everybody that’s affected.

Reuters reports GM is now under the gun of a $10 billion lawsuit filed by Hagens Berman Sobal Shapiro in federal court in Riverside, Calif. on behalf of Anna Andrews. The lawsuit calls for compensation due to lost resale value for those who owned or leased a GM vehicle between July 10, 2009 and April 1, 2014; Andrews herself claimed she would have not purchased her used 2010 Buick LaCrosse — or would have opted for a lower price — “had GM done a better job of disclosing vehicle defects.” Should all come to pass, some 15 million GM customers would receive damages whether their vehicles were recalled or not.

Detroit Free Press says the families affected by the defective switch at the heart of the February 2014 recall made an appearance alongside U.S. Senator Richard Blumenthal of Connecticut prior to Wednesday’s hearing to help others who may have been harmed by products not under recall, and to call for quicker issuing of recalls of flawed vehicles. The families shared stories of how GM’s negligence destroyed the lives of not only those behind the wheel of the vehicles with the defect, but their lives as well. Blumenthal added that “the victims who settled should be given the opportunity to recontest their claims.”

Finally, Center for Auto Safety director Clarence Ditlow penned a letter to Valukas, stating the attorney had accepted the automaker’s defense “that its engineers and senior managers did not know” stalling in vehicles was a major safety issue, to the detriment of his report. He added that the Valukas report had omitted or missed evidence “in constructing what amounts to a corporate defense against criminal charges… that show GM at its highest levels of management considers stalling to be a safety defect.” The report said officials did not consider stalling issues in the Cobalt or Saturn Ion as a hazard until the issue was linked to the failed deployment of air bags due to a loss of power prior to an accident.