An occasional column by Gabe Nelson, Automotive News' D.C. correspondent, analyzing the auto industry's relationship with Washington.
GM: Back in Congress' cross hairs
Gabe Nelson is a reporter for Automotive News and is based in Washington, D.C.
WASHINGTON -- General Motors thought it was through with this town.
It was only December when then-CEO Dan Akerson came to Washington to give a speech marking GM’s exit from partial government ownership, which for executives seemed to mark the end of five turbulent years as a target on Capitol Hill.
“The end of the ‘Government Motors’ era has cleared the runway for the team to soar,” Akerson said, a week after naming Mary Barra as his successor. “And soar we will, because we are building a GM that America can be proud of.”
The runway was cleared, all right. But the plane is now headed back to Washington, and lawmakers don’t seem too proud of what GM built.
Two committees -- one in the U.S. House, one in the U.S. Senate -- plan to hold hearings in the coming weeks to examine why it took GM a decade to fix an ignition switch defect that affected 1.6 million cars worldwide. According to GM, the glitch deactivated the airbags in car crashes that killed at least a dozen people.
As GM learned the last time around, Capitol Hill is a risky setting. When lawmakers are campaigning for office and crafting sound bites for the nightly news (not to mention Twitter), they’re liable to say anything to make a point. GM will be lucky to finish its sentences.
And even before the hearings, GM will be on the hot seat. More information about the company’s response to the ignition switch glitch will be dribbling out in the next few weeks. On Tuesday, March 18, GM faces a deadline to brief U.S. House committee staff. Full responses to a sheaf of questions from the committee are due March 25. And April 3 is the deadline for responding to a 107-question data request from the National Highway Traffic Safety Administration.
Mary Barra, left, Alan Batey and Alicia Boler-Davis are among potential witnesses for General Motors.
Here’s what to expect when GM executives take the witness chair:
House Energy and Commerce Committee
NHTSA staff briefed Energy and Commerce staff members on March 10. The same day, Chairman Fred Upton, R-Mich., announced that he wants the committee to hold a hearing on the recall situation within a few weeks.
Upton and the panel’s top-ranking Democrat, Rep. Henry Waxman of California, have already fired off joint letters to GM and NHTSA, along with famed Detroit 3 guardian John Dingell, D-Mich., and several other lawmakers, asking for copious amounts of data about what went wrong. It is a clear sign that the concerns transcend party lines, and that the Michigan delegation is unwilling to give GM a pass.
“There are several questions surrounding this latest recall,” Upton said. “Right now we are just looking for answers to determine what the company and NHTSA knew about these problems, when they knew it and what they did about it.”
Upton’s committee has great sway, and from the letters that he and Waxman sent, it seems clear that they intend to use it to figure out what happened.
Upton: "We are just looking for answers."
What to watch for: Political gunplay. This committee has been a partisan powder keg in recent years, and GM’s bailout continues to make for dramatic political theater. Don’t be surprised if lower-ranking committee members ask questions such as: “Is it a coincidence the U.S. Treasury finished selling its stock in GM right before the recall was announced?”
Senate Commerce Committee
Chairman Jay Rockefeller, D-W.Va., asked Sen. Claire McCaskill, D-Mo., to hold a hearing about the GM recall in a consumer protection subcommittee that she heads. Within days, McCaskill said she will hold a hearing in April.
“We have to get to the bottom of this,” McCaskill said. “We need to find out who dropped the ball and put millions of Americans at risk. We also need to make sure that General Motors and federal regulators are doing everything they can to prevent more tragedies like this now and in the future.”
What to watch for: A policy push. It has been 14 years since the Ford-Firestone recall crisis spurred Congress to pass the TREAD Act, requiring automakers to submit “early warning data” to NHTSA. The Senate is controlled by Democrats, who favor strong auto-safety regulations, and they will want to know if a stronger law might have gotten the cars fixed more quickly.
A legislative proposal wouldn’t go anywhere in this gridlocked Congress, but it could be the spark that starts a slow burn toward reform.
Who will speak for GM?
Congressional hearings follow an arcane set of written and unwritten rules. Expect multiple panels at each hearing, with one panel that includes GM executives and a separate panel that includes NHTSA officials, so the company and its regulators don’t point fingers at one another on the dais.
Acting Administrator David Friedman is likely to testify on behalf of NHTSA, but it’s harder to say who will speak on behalf of GM. Selecting witnesses usually involves some back-and-forth between a committee and a company. Here are four possibilities:
Barra, CEO: Committee staffers would love to have her; the image of Barra being grilled would make every nightly newscast. But GM would be reluctant to send her as a witness because she became CEO just two months ago, and the company says she did not learn of the defect until then.
Alan Batey, president for North America: Batey is the executive whom GM has quoted in its public statements on the recall. For instance, his name was attached to a Feb. 27 op-ed in USA Today in which GM said it was “deeply sorry” for the events that led to the recall. That suggests he may be GM’s preferred spokesman.
Alicia Boler-Davis, senior vice president of global quality and customer experience: Aside from overseeing quality, Boler-Davis has worked in manufacturing and was a vehicle line director for the Chevrolet Sonic, so she would be well-suited to answering questions about the operational practices that delayed this recall.
Michael Robinson, vice president of sustainability and global regulatory affairs: Based in Washington, Robinson knows the key players on Capitol Hill and at NHTSA. He is a veteran witness at congressional hearings, and he also knows what to say and what not to say when the camera lights are shining.
And don’t forget about ... the U.S. Justice Department
The U.S. attorney’s office in New York has also begun a criminal investigation into whether GM moved in a timely manner to recall the affected cars, unidentified sources told the Associated Press, The New York Times and Reuters last week.
Because it is a criminal investigation, GM could be exposed to far greater penalties than the civil penalties levied by NHTSA, which are capped at $35 million. Investigations can take years, though, so it could be a while before the ramifications are clear.
What to watch for: Virtually nothing. The Justice Department has a policy of not disclosing its findings until it brings charges or reaches a settlement. Unless documents leak to the press or GM executives comment on the investigation -- which would make their lawyers very unhappy -- do not expect any indication of where the probe is headed.
You can reach Gabe Nelson at email@example.com.