The No. 1 U.S. automaker has come under fire from the Justice
Department, lawmakers and other authorities probing why it waited
more than a decade to recall 2.6 million cars with an
ignition-switch flaw that has been tied to at least 13 deaths.
Barra's latest turn in the congressional hot seat comes just days
after GM recalled more than 3 million additional vehicles that
apparently suffer from a separate ignition defect.
GM has not tied any fatalities to that defect.
The automaker has portrayed the additional recalls as the product of
its thorough review of all safety issues since the ignition-switch
recalls were first announced in February.
But lawmakers last week immediately pounced on the mounting recalls
as potential evidence of bigger safety problems at GM.
For the hearing on Wednesday, House Energy and Commerce Committee
Chairman Fred Upton said he wants "straight and honest answers"
about what got the company into the mess and how GM is fixing it.
"GM's work to restore drivers' confidence is far from over," Upton
said in a statement to Reuters.
GM has issued 44 recalls this year totaling about 20 million
vehicles worldwide, which is more than total annual U.S. vehicle
sales. Of the recalls this year, nearly 6.5 million of the vehicles
were recalled for ignition switch-related issues, including more
than half a million Chevrolet Camaros on Friday.
The ignition-switch problems can cause the cars to stall during
operation. Because of the engine stalls, air bags failed to deploy
during crashes - some of them fatal - and drivers had difficulty
operating their vehicles because power steering and brake systems
Analysts said they are expecting lawmakers to give Barra rough
treatment on Wednesday.
"I don't expect it to be a cakewalk," said Michelle Krebs, a senior
analyst with AutoTrader.com. "I think there will be increased
questions about how safe all of the vehicles are in light of all
GM plans to address the ignition switch issue in the 3 million cars
recalled this week by replacing or modifying keys to eliminate a
slot in the end of the key. The slot allows a dangling key ring to
slip to one side and pull the ignition key out of the run position.
A spokesman said the ignition switches did not need to be replaced,
even though they were "slightly" below the company specification for
torque -- the force needed to move the switch out of the run
[to top of second column]
A better, if more costly solution would be to "change the ignition
system to a more robust design," said Sandy Munro, owner of a
Detroit-area engineering consulting firm that does work for both
automakers and the U.S. government.
Munro described the key fix as "cheap, quick and temporary."
Barra, in her prepared testimony which was made public on Tuesday,
said GM is addressing any and all safety concerns. She also said the
company is committed to change.
"I want this terrible experience permanently etched in our
collective memories. This is a tragic problem that never should have
happened. And it must never happen again."
Barra will appear with Anton Valukas, the GM-hired investigator who
delivered a report earlier this month that spared top executives and
pinned blame on lower-level engineers and lawyers.
The report said those employees either did not appreciate the danger
of the flaw or did not share the risk with their superiors.
GM and Barra have so far weathered the scandal with few signs of
permanent damage. The automaker's May U.S. sales were up 12.6
percent from the prior year, well above analyst expectations, and
its share price is slightly stronger than just before the
announcement of the first ignition-related recall on Feb. 13.
Brian Johnson, analyst at Barclays Capital, said he is viewing the
recently announced recalls as the result of a "deep-dive catch-up"
on safety issues, including many minor ones.
He said Barra will need to show on Wednesday that GM is aggressively
pursuing organizational and cultural changes.
"They need to communicate to Congress that they've done a thorough
job, and to Wall Street that most of these major recalls are behind
(Reporting by Karey Van Hall and Richard Cowan in Washington, Paul
Lienert in Detroit; editing by Matthew Lewis and Peter Henderson)
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