Rough road ahead for GM as U.S. Congress plots safety probe

Fri Mar 21, 2014 5:53am EDT
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By Richard Cowan

WASHINGTON (Reuters) - The U.S. congressional investigation into General Motors Co automobile defects will bring aggressive scrutiny to a company with powerful lobbying clout and strong ties on Capitol Hill.

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.   Continued...

A General Motors logo is seen on a vehicle for sale at the GM dealership in Carlsbad, California January 4, 2012. REUTERS/Mike Blake