GM's recall of 1.6 million vehicles, due to an ignition-switch
problem linked to 12 fatalities, has put the Detroit automaker in
Congress' cross hairs, with potentially dramatic hearings kicking
off in April.
GM Chief Executive Mary Barra is scheduled to testify on April 1 to
a U.S. House of Representatives panel investigating the ignition
problem. In what could be a preview of such testimony, Barra on
Monday declared in a video that "something went wrong with our
process" and "terrible things happened."
The handling of the defect by GM, which first noticed it in 2001,
and federal regulators is the top priority of the powerful House
Energy and Commerce Committee, according to aides.
Congressional investigations into consumer safety issues always have
the potential of becoming a public relations nightmare for companies
at the center of the probes.
In early 2010, for example, Congress looked into sudden, unintended
acceleration problems Toyota owners had been reporting for years,
which were linked to five deaths.
"I ... was praying to God to please help me," testified one Toyota
owner, who said her Lexus 350 ES had accelerated out-of-control. "I
thought it was my time to die."
Before it was all over, Toyota sales fell, its reputation suffered
and Congress toughened regulations. Just this week, the company
agreed to a record $1.2 billion penalty stemming from a Justice
Department criminal investigation that could provide guideposts for
the GM probe.
The House Energy and Commerce Committee will have broad powers to
investigate the actions of GM and the National Highway Traffic
Safety Administration, including the ability to subpoena witnesses
and documents. The panel has also invited NHTSA acting Administrator
David Friedman to testify at the April 1 hearing.
The session is the first in what will likely be a series of
GM customers could have dramatic stories to tell, since the ignition
issue turned off engines and disabled airbags in cars moving at high
speed, resulting in deadly accidents.
One committee aide said nearly a dozen of the panel's investigators
were working on finding out why flawed ignitions in older Chevrolet
Cobalts, Saturn Ions and other GM models were allowed to stay in the
cars for so long with owners uninformed.
"The broad question the committee wants to answer is, 'Is this a
problem that could have been prevented or detected any earlier than
it was?'" said one House Energy and Commerce aide.
GM has long had allies in Congress, most notably Michigan
Representative John Dingell, the former committee chair. But the
hearings will not be the first time the auto giant has been roughed
up by lawmakers.
In 2012, a House of Representatives committee looked into an
unrelated safety issue: Car battery fires in GM's new hybrid
electric car, the Chevrolet Volt. In 2008, GM, Ford Motor Co and
Chrysler executives were taken to task by some members of Congress
when they flew corporate jets from Detroit to Washington to testify
in favor of a government bailout.
GM's allure may have suffered so much from its subsequent government
takeover that only four members of Congress, out of 535, owned the
company stock in 2012, according to the Center for Responsive
Five CEOs ran GM during the period of more than a decade since the
ignition problem first appeared.
Some aides also warn that what might appear in hindsight to be
inexcusable missteps by GM and federal regulators could have been
complex and hard-to-define problems as they were unfolding.
GM AND FRED
The House hearings will be run by Michigan Representative Fred
Upton, a Midwesterner with an unassuming demeanor, who sometimes
tells reporters, "Just call me Fred."
As chairman, Upton has aggressively challenged President Barack
Obama's administration on its Obamacare health plan and guided his
committee through a tough investigation of the Solyndra solar-panel
company, which filed for bankruptcy in 2011 after receiving $528
million in loans from the federal government.
Upton also played an important role in the 2000 congressional
investigation of Ford's SUV rollover problems associated with
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After emotional hearings, Congress quickly toughened the industry's
Teaming up with Upton is the committee's senior Democrat,
Representative Henry Waxman, a dogged legislator who has taken on
the U.S. tobacco industry, helped enact Obama's landmark healthcare
law and won passage of a sweeping climate change bill in the House
Also senior on the Energy and Commerce Committee is the "dean" of
the House, Representative John Dingell of Michigan, who was the
panel's top Democrat from 1981 to 2008 and is widely seen as GM's
staunchest ally in Congress.
"He was a very, very strong chairman.
He protected the prerogatives of Detroit and the automobile
industry," said Democratic Representative Eliot Engel of New York,
also a longtime member of the committee.
But Dingell's star power faded after Waxman wrested away the
committee chairmanship in 2009. Waxman remained the lead Democrat on
the committee after Republicans took control of the House in 2011.
The 87-year-old Dingell recently announced his retirement later this
year after a record 59 years in office.
Dingell's wife, Debbie, who has deep family ties to GM, intends to
run for her husband's congressional seat.
INVESTIGATION, THEN LEGISLATION?
Joan Claybrook, a former National Highway Traffic Safety
Administration head and president emeritus of the watchdog group
Public Citizen, said that "from time to time," Congress had proven
it can be tough on the U.S. auto industry.
She noted that during the Ford/Firestone investigation, Congress
demanded that the companies "submit all sorts of documents they
didn't want to submit" and made them public.
Claybrook and fellow consumer advocate Ralph Nader said in separate
telephone interviews that the scope and aggressiveness of Congress'
investigation of GM would depend in part on sustained public outrage
and pressure to act.
"The public is mad as a hornet about this GM cover-up,"
Nader, who wants GM to set up a victims' compensation fund, said the
hearings would help "keep the fire under the seat of the Justice
Department" as it pursues a criminal probe.
Republicans, who control the House, will not want to ally with GM on
a safety problem that has enraged the public, added Nader, who won
fame in the 1960s by taking on GM and championing safety issues in
his book "Unsafe at Any Speed".
If House lawmakers or Senator Claire McCaskill, a Democrat who also
plans to hold hearings in April in her Commerce Committee panel,
decide legislation is needed, GM's lobbyists are sure to respond.
With 87,000 hourly and salaried workers in 60 plants scattered
across the United States, GM and its employees are an important
constituency for lawmakers.
GM spent nearly $9 million last year on an army of lobbyists whose
job is to promote the company's interests in Congress and throughout
the federal government. One registered lobbyist, Emily Porter, is a
former adviser to House Speaker John Boehner.
Asked about GM's sway with Congress, veteran Democratic
Representative John Larson of Connecticut told Reuters: "It always
makes it problematic for Congress" because so many of the company's
jobs are located in lawmakers' home districts.
Still, House Energy and Commerce aides insist GM will get no
favorable treatment. "You have one hearing and you see where the
evidence takes you" before deciding next steps, said one aide.
(Additional reporting by Thomas Ferraro;
editing by Caren Bohan,
Peter Henderson and Peter Cooney)
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