Other views: GM must come clean, compensate victims

  • Posted: Tuesday, April 8, 2014 12:01 a.m.

For the car-buying public – indeed, for all drivers – the news from the latest General Motors scandal is deeply discouraging: Some companies remain loath to reveal mistakes even when it costs lives, and regulators too often are asleep at the wheel when it comes to public safety.

Repeated vehicle recalls by car manufacturers have led drivers and car buyers to assume that all companies respond quickly and responsibly, regardless of cost, when vehicle defects are spotted. Most car companies seem to have a good record in that regard.

But the disclosures surrounding GM’s dereliction show that the best interests of consumers took a back seat to profits when company engineers became aware of a critical design flaw in ignition switches in some cars, mainly Chevrolet Cobalts and Saturn Ions. A failure could suddenly cut off engine power and deactivate air bags, but engineers determined that replacement would cost 90 cents a car and return only 10 cents to 15 cents in warranty-cost savings. So, shamefully, nothing was done.

And even today, the response has been far from adequate.

Testifying before Congress this week, General Motors CEO Mary Barra failed to explain why it took GM nearly a decade to issue a recall. She blamed a series of bad decisions on the company’s “cost culture,” a blanket condemnation of GM’s legacy that neatly sidesteps individual accountability.

She said today’s GM boasts a “customer culture,” but her overall testimony was far from reassuring. Pressured by members of a Senate panel on Wednesday to tell the owners of the 2.6 million cars being recalled to stop driving them until they are repaired, Barra refused. She insisted the cars are safe to use while owners wait for the replacement part.

Neither members of Congress nor relatives of some of the 13 people killed in accidents blamed on faulty switches were mollified. Nor should they be. Among the many questions she left unanswered is the baffling conundrum of why GM approved the use of a part in its switches that did not meet the company’s own specifications.

Barra said she only learned about the problem when she became CEO recently, but some lawmakers were skeptical, given that she has spent her entire professional career at the company.

If she didn’t know, it raises the question of whether the ignition flaw was a company secret so tightly held that even ranking executives were kept in the dark – suggesting a cover-up. After listening to her on Wednesday, two former prosecutors now in the Senate said GM’s actions were tantamount to criminal activity.

The GM saga suggests that the company has failed to learn that cutting corners at the expense of safety is a failure that carries deadly consequences for the victims – and requires an effective response from the government.

The Justice Department is already conducting a criminal investigation, but the National Highway Traffic Safety Administration, one of the industry’s regulators, failed the public in this case. Twice it came close to mounting an investigation, but ultimately did nothing. Barra has hired attorney Ken Feinberg, who administered a compensation fund for 9/11 victims, to look into the case – a shrewd PR move – but she has not committed to create a settlement fund.

She should do so immediately, come clean with federal investigators about who knew what, and when, and complete an internal investigation that holds employees who put profits above human lives accountable for their actions.

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