GM CEO Mary Barra is sworn in before testifying at a House Energy and Commerce Committee oversight panel hearing in Washington on Tuesday.

Photo credit: BLOOMBERG
GABE NELSON

3 things the GM hearing exposed: Leaks, blurred lines and a media circus

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Gabe Nelson is a reporter for Automotive News and is based in Washington, D.C.
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WASHINGTON -- If you boil it down, few new facts emerged from Tuesday’s frenzied four-hour U.S. House hearing on General Motors’ recall crisis, prompted by a faulty ignition switch that GM has linked to dozens of crashes and at least 13 deaths.

GM CEO Mary Barra stuck to script beautifully. In two hours of testimony, she told members of the U.S. House Energy and Commerce Committee that the company made “unacceptable” mistakes, that an investigation will sort out how those mistakes happened and that she wants to know the answers as badly as Congress does.

David Friedman, the acting administrator of the National Highway Traffic Safety Administration, was pressed by lawmakers to explain how the agency missed the fact that the ignition switch could turn off the airbags in GM’s cars. He, too, deftly argued his case, saying that other factors could have caused the airbags not to deploy -- and a statistical analysis by the agency did not show GM vehicles were more problematic.

“I wish these crashes were as simple as they appear to be,” Friedman told lawmakers at hearing’s end. “I wish the connection was as direct as we now know it is.”

It will be a while until the chain of events becomes clear. Congress and NHTSA are gathering reams of documents from both GM and the government; expect them to trickle out over the coming weeks, shedding light on the truth one batch of records at a time.

But the Tuesday hearing gave a strong indication of which way things are headed on Capitol Hill, as GM struggles to make things right with its customers and come to terms with the mistakes made over the course of a decade.

Here are three main takeaways:

1. Let the leaks begin.

Lawmakers on Capitol Hill are already releasing GM documents from their investigation, adding to the list of executives who knew about the ignition switch problem. During Tuesday’s hearing, printed copies of an e-mail chain dating to September 2005 were distributed to reporters.

It had the subject line: "No new Delta/Kappa ign switch for MY 08,” referring to the vehicle families upon which cars like the Chevrolet Cobalt and Saturn Ion were based.

In the first e-mail, dated Sept. 28, 2005, an engineer named John R. Hendler says he was “very aware of an issue with ‘inadvertent ignition offs’ because of the low mounted ignition switch in the steering column and the low efforts required to rotate the ignition.”

Replacing the switch, however, would have cost about $0.90 per ignition switch -- $400,000 in tooling, spread across approximately 500,000 switches, Hendler wrote. And “offsets” from reduced warranty costs would only save $0.10 to $0.15 per switch.

Hendler suggested that redesigning the shape of the key would help with the “inadvertent offs” problem, and recommended that a redesign of the switch wait another year -- until the 2009 model year.

Sixteen people identified by their e-mail addresses as GM employees received the e-mail, including Lori Queen, the now-retired vehicle line executive for GM’s small cars, and Ray DeGiorgio, an engineer now known to have approved a part change for the defective ignition switch in 2006.

Queen wrote to the group on Sept. 29, 2005: “I’m not sure its ok to wait. I want to discuss.”

But the following day, DeGiorgio received an e-mail, saying the ignition switch had been changed back to “carryover” -- meaning the same -- for model year 2008.

David Friedman, acting administrator of NHTSA, was pressed by lawmakers to explain how the agency missed the fact that the ignition switch could turn off the airbags in GM’s cars.

Photo credit: REUTERS

2. Congress and the media smell blood.

Before, during and after the hearing, U.S. Capitol police officers barked orders at a crush of cameramen, photographers and reporters, just like the one Barra encountered during her coming-out party as CEO at the Detroit auto show in January.

Barra came to speak briefly with the press after her testimony; her words were barely audible above the shutter clicks of photographers. At one point, a police officer loudly argued with journalists -- interrupting Barra’s remarks -- about photography protocol.

Even in the heated environment of Capitol Hill, it was an unusually feverish affair.

And Congress seemed equally interested. There were between 16 to 20 members of the House Energy and Commerce sitting on the dais for Barra’s testimony -- an almost unheard-of level of participation for a subcommittee hearing.

But from the looks of things, they were more upset with GM than NHTSA. Turnout dwindled to about half a dozen members while Friedman spoke.

Granted, it was late in the day and members had other places to be, but the tone and the questions both mellowed as well. Congress seemed to harbor doubts about whether NHTSA did everything it could -- but seemed sympathetic to the argument that GM’s cars didn’t stand out as outliers.

3. Party lines don’t seem to matter.

The hearing was bipartisan in nature, and featured a distinct lack of grandstanding.

Democrats and Republicans alike asked detailed questions of GM and NHTSA, which Rep. Peter Welch, D-Vt., captured in a joke: “I have to congratulate GM for doing the impossible: You have Republicans and Democrats working together.”

Lawmakers regularly broke with stereotype. Business-friendly Republicans took shots at GM’s business practices. Among them was Rep. Joe Barton of Texas, an engineer by training, who said he was incredulous that GM would approve an ignition switch that did not meet its own internal specifications for torque.

Similarly, Rep. Phil Gingrey, R-Ga., praised Lance Cooper, the Georgia attorney who almost singlehandedly turned up the defect and forced GM’s hand while representing the family of a woman who was killed in a Cobalt with a defective ignition switch.

Republicans tend to favor tort reform that makes it tougher for trial lawyers to secure settlements from corporations, but Gingrey called Cooper a “great plaintiff’s attorney.”

The bottom line is this: the bailout era is over, and GM does not evoke the same partisan feuding that it once did. Red or blue, the lawmakers simply want to know how GM ended up using a defective switch, and took so long to fix it.

You can reach Gabe Nelson at gnelson@crain.com.

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