U.S. senator accuses GM of 'culture of cover-up' in recalls

Wed Apr 2, 2014 4:36pm EDT
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By Ben Klayman and Eric Beech

WASHINGTON (Reuters) - General Motors Co CEO Mary Barra came under withering attack for her company's decade-long failure to deal with defective parts linked to fatal crashes, in a hearing where U.S. Senators accused the company of "criminal" behavior and "a culture of cover-up."

Democratic and Republican senators, including some former prosecutors and state attorneys general, challenged Barra's assertion that GM had vastly improved its safety and management practices since emerging from bankruptcy.

Repeatedly, she was pressed to explain why GM redesigned faulty ignition switches in 2006 but did not change the identifying part number. That has raised questions about whether the company was trying to conceal the problem, after years of consumer complaints and at least 13 deaths linked to the faulty part.

"I believe this is criminal," said Republican Senator Kelly Ayotte of New Hampshire. The Senate grilling was decidedly more emotional than the previous day's panel in a House of Representatives subcommittee, while Barra was calm and measured both days.

Seated behind Barra as the CEO responded to senators' questions, the parents of 21-year-old Kelly Erin Ruddy, who died in a 2010 accident in Pennsylvania while driving a 2005 Chevrolet Cobalt, held up photos of their daughter and the wrecked car.

Barra, who was promoted to CEO in January, said in her prepared testimony: "While I can't turn back the clock, as soon as I learned about the problem, we acted without hesitation."

Barra testified that issuing a new part without new model or serial numbers was "completely unacceptable" and violates fundamental practices. "It's engineering principle 101 to change the part number when you make a change," she said.

Democratic Senator Claire McCaskill chairs the Senate subcommittee on consumer protection and product safety that is investigating GM. The automaker is often thought of as two companies: the "Old GM" which bust and the "New GM" which emerged after its 2009 bankruptcy.   Continued...

General Motors CEO Mary Barra testifies before the Senate Commerce and Transportation Consumer Protection, Product Safety and Insurance subcommittee in Washington April 2, 2014. REUTERS/Gary Cameron