Blumenthal Presses GM CEO On Safety Of Defective Cars Still On The Road

Senator Asked Barra Whether GM Would Strengthen Language In Its Recall Warnings, And Establish A Compensation Fund

Washington, DC) – At a Senate hearing on the recent General Motors’ (GM) recall, U.S. Senator Richard Blumenthal (D-Conn.) today pressed CEO Mary Barra on the safety of defective cars that are still being driven by the company’s customers. Specifically, he asked Barra if the company would include stronger language in its recall warnings and establish a compensation fund for victims.

While GM is seeking counsel from compensation expert Kenneth Feinberg, the company has not set up a compensation fund for victims; and while its recall warnings use detailed language about the conditions under which certain car models are likely to shut off, the warnings do not instruct customers to park the defective cars.

BLUMENTHAL:

Is it your testimony here today that those cars are as safe as any other car on the road today?

BARRA:

Again, as you look across all the safety technology that is on vehicles from the past to present, there's variation on safety based on the technology that's on cars today. So there's variation with – across the whole population.

A full transcript of Blumenthal’s exchange with Barra is below. To watch the exchange, click here

BLUMENTHAL:

Thank you, Madam Chairman. And thank you, Senator McCaskill, for holding this hearing.

Thank you, Ms. Barra, for being here today. You and I have met before, haven't we?

BARRA:

Yes, we have.

BLUMENTHAL:

And I'm going to tell you now what I said then, which is I have enormous admiration and respect for your career, what you've accomplished, and the leadership that you've provided to G.M. And I also have enormous respect for your company. It's an iconic, enormously important manufacturing company and it produces terrific products (inaudible).

And I know that you're accompanied here by a regiment of lawyers and a battalion of public relations consultants, and that your breaking with the culture is a very difficult step. But let me, with all due respect, suggest three steps – at least three steps that you can take if you really want to break with the culture and show the leadership that I think is worthy of G.M. and worthy of your leadership.

Number one, commit to a compensation fund that will do justice for the victims of the defect that killed people in your cars. Number two, warn drivers who are currently behind the wheel of those cars that they should not drive them until they're repaired, because they're unsafe. And number three, support the measure that Senator Markey and I have proposed that would improve the system of safety accountability going forward, require more disclosure to the public, and better transparency in reporting by the car manufacturers in case of defect, to the federal agencies.

And the federal agencies have a substantial share of the blame in this instance. I think it's pretty much incontrovertible that G.M. 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.

So I think these steps are appropriate, and I hope that you will adopt them despite whatever the complexities that you see and whatever the advice is that you're getting.

And I want to know, first of all, what is it that Ken Feinberg has to work through to convince you that there should be compensation to these victims?

BARRA:

Ken Feinberg has just indicated (inaudible) as he goes in, he interviews a lot of people, tries to get a complete understanding of the process...

(CROSSTALK)

BLUMENTHAL:

But he is not – and excuse me for interrupting you, but we all have five minutes here, so I'm trying to make the best use of it as possible – he's not a bankruptcy expert. And right now, G.M. is still in courts across the country invoking a blanket shield from liability that's the result of its deception and concealment to the federal government.

BLUMENTHAL:

I opposed it at the time, as attorney general for the state of Connecticut, not foreseeing that the material adverse fact being concealed was as gigantic as this one. But why not just come clean and say we're gonna do justice here; we're gonna do the right thing; we're gonna compensate victims, knowing that money can't erase the pain or maybe even ease it, but it's the right thing to do?

BARRA:

Our first step in evaluating this is to hire Mr. Feinberg, and we plan to work through with him, and understand his expertise. As I 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.

BLUMENTHAL:

Let me go on to the next step. Let me show you the recall notice. And I'm sure you've seen it.

It says "the risk increases if your key ring is carrying added weight such as more keys or the key fob, or" – and I stress – "or your vehicle experiences rough road conditions or other jarring or impact-related events."

Even with all the weight off the key chain, doesn't that recall notice tell you that cars should not be driven where there are rough road conditions or other kinds of potential jarring events?

BARRA:

The testing that has been done has been on our proving ground, that has extensive capability where the vehicle would be jarred, and with just the key or the key and the ring, it has – it has performed.

BLUMENTHAL:

Is it your testimony here today that those cars are as safe as any other car on the road today?

BARRA:

Again, as you look across all the safety technology that is on vehicles from the past to present, there's variation on safety based on the technology that's on cars today. So there's variation with – across the whole population.

BLUMENTHAL:

Is – that Cobalt car as driven now, safe for your daughters to drive? Would you allow them behind the wheel?

BARRA:

I would allow my son and daughter – well, my son, because he's the only one eligible to drive – if he only had the ignition key.

BLUMENTHAL:

So the added risk if you have only the ignition key of driving that car on the road is zero? There's no additional risk of driving the unrecalled Cobalt on the road?

BARRA:

The testing that we've done as it relates to this indicates that the weight is not – would not cause that issue.

(CROSSTALK)

BLUMENTHAL:

My time...

BARRA:

And if someone – can I just say, if someone is uncomfortable, though, we are providing loaners. If someone asks for a loaner, a loaner is provided.

BLUMENTHAL:

Well, again, I would respectfully suggest that you advise your customers to get loaners rather than driving these cars.

Thank you, Madam Chairman.