GM to review, reorganize legal dept in response to recall

Wed Jul 16, 2014 6:18pm EDT
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By Julia Edwards

WASHINGTON (Reuters) - General Motors Co has appointed an outside law firm to investigate its legal department, which is under fire for its role in the company's mishandled ignition switch recall, the automaker's top lawyer will announce at a Senate hearing.

Lawmakers and safety advocates have questioned why GM lawyers, who repeatedly settled cases involving the malfunctioning ignition switch, did not relay concerns about the part to the wider company and prompt a recall.

Instead, the automaker took more than 10 years to recall millions of vehicles outfitted with the deadly ignition switch, which can slip from the "run" to the "accessory" position, causing the engine to stall, airbags to not deploy, and a loss of power brakes and power steering.

So far, GM has attributed 13 deaths and 54 crashes to the specific defect.

Michael Millikin, the general counsel of GM, said the automaker has appointed a "well-respected outside law firm to conduct a zero-based review of GM's litigation practices," according to written testimony prepared for the Senate Commerce subcommittee hearing on Thursday.

He did not name the firm.

Millikin also said that he has reorganized the legal staff to report directly to him, in response to criticism that GM's organizational structure barred top executives from learning about the flawed part earlier.

Now, whenever GM reaches a settlement or goes to trial on a case involving a fatality or serious injury, Millikin said he will review the case for engineering issues.   Continued...

General Motors World Headquarters is seen in downtown Detroit June 10, 2014. REUTERS/Rebecca Cook