Transcripts For CSPAN General Motors Recall Spotlight 20140820

Override and to use this part even though it didnt meet specificication . Was that made at the manufacturing level, at the executive level or even at some subcomponent purchasing level . Do you know that . Thats part of our investigation to find the answer to that question. Thank you. Thank you, mr. Chairman. You can watch this entire hearing on our website, www. Cspan. Org. We invite your feedback on this issues bought Light Program on the gm recalls. Call this week, we will be focusing on president Lyndon Johnsons vision for a Great Society and its impact today. Join the conversation by calling us or sending us an email. You can also send us a tweet. A couple of live events to tell you about tomorrow here on cspan beginning with the Community Action are ship annual convention. Include Sister Simone campbell and the author of a nun on the bus. A discussion on the conflict between russia and ukraine. Family members of victims who gmsor were injured due to faulty car ignition switches held a News Conference on capitol hill in april. Their comments are about 10 minutes. I was your typical 20yearold. One of my prized possessions was my brandnew car. I had a beautiful red cobalt. Was good on gas. It was mine, all mine. I had friends living in different states. Hopefully i had a reliable car to get there. All of a sudden, my car went from 45 Miles Per Hour to zero within seconds. To avoidwerved crashing into me, i cried hysterically. Two men jumped out of their cars to push me to a gas station off the side of the road. I called my mother crying. She told me to shut the car off and when i turned it back on, it was fine. Was onened again when i a long haul to visit a friend in tennessee. The same exact thing happened. Thankfully, the car behind me was very alert. I turned the key in the ignition once again and the car was good to go. When i returned home, my mother and i took a car to the Service Center for second time. She insisted they keep the car until they figured out the problem. After 10 days, they said they found the problem. They informed me that you believe my knee keying my keyring was slightly enlarged. Then it happened a third time. I somehow escaped a fourcar pileup. At that point in my life, i was diagnosed with Heart Disease and i had a pacemaker implanted. This led my mother and i to decide this car was a death trap. Driving this car was like laying a game of russian roulette with my safety and that of my friends. I cannot begin to explain the fear and confusion that runs through you when you no longer have control of your car. My hope is that the horror stops right now. I dont want anymore truck more drivers to be mourned by family and friends. To close by quoting my mothers letter. Said this is a safety recall issue if there ever was one. I should not have to list to the safety problems. This car needs to be recalled, reexamined, revised and corrected. Thank you. Have terri will batista. Good afternoon. My name is jerry di batista. We helped amber take out her because of itslt highly rated safety features. Now we know gm was aware of the fact that there were problems with the ignition switch before the car was even available to the public and the problem would result in the airbags not deploying. I feel that gm needs to be held countable to the public for allowing these deadly switches to be used. The department of justice to hold a criminal investigation. It is my sincere hope that there will be changes made to the law avoid families experiencing my tragedy. My name is laura christian. I am the birth mother of amber murray rose, the first known fatality of the chevy cobalt effects. At first, it was one and then we were a few. As you see, we are many and there is still more. This is just the tip of the iceberg. We are the people left behind when a loved got into what was supposed to be a safe car, a gm car, a car that gm knew for years was dangerous and effective. Sons, sisters, brothers, mothers, fathers, wives, and husbands are gone because they were a cost of doing business gm style. Corporate executives made a decision that fighting the problem was cheaper and easier than fixing the problem. My mission is twofold. First, make sure that everyone driving one of these dangers cars is aware of the facts. Of the defects. When i went to the website of the national Highway Traffic Safety Administration known as sa, i was distraught to see a small message about the recall that was replaced by the next message and seven seconds. It does not mention the People Killed by this defect. Called urgent. Nhtsa must be more urgent. The second part of my mission is to reform the way gm and other Car Manufacturers do business. Car manufacturers cannot be permitted to continue as if there is an Acceptable Loss of life. Is the time now it for congress to act legislation that will give the Public Access to lifeanddeath information and give automakers a warning that this is not acceptable and will not be tolerated. Nhtsa. Needs more resources to get their job done. To takeongress immediate action to provide additional funding for nhtsa and make the agency more transparent and informative. Ourse help us protect children and pass legislation to make sure it does not happen again. Thank you. Now we will have can rimer of wisconsin. I am here before you today as a voice of my stepdaughter and her friend. Their voice, their whole life on the evening of october 24, 2006, while writing with another friend in her fatherinlaws 2005 chevy cobalt. Shoppingto be a simple excursion turned into a death trap as their vehicle, without any warning, lost power. The Steering Wheel lock. The power brakes no longer worked. And the safety airbags were turned off. The car followed a path off the road, went airborne along and adjourning an adjoining driveway and collided with a group of trees. Miraculously, all three girls survived and were rushed to the areas local trauma centers. Amy, with her extensive head injuries, passed away within hours. The tosha, after surgery, kept onve by life support, held for nine days before being pronounced brain. Megan survived but still suffers his goal almonds and mental anguish as being the sole survivor. My life jane lost everything. The tosha was her only net was her onlysha child. No Family Member to care for her as she grows older, a fervor hole in her heart for the daughter she so loved. The accident report shows thats it was not a factor, whether was not a factor, no are road nor Road Conditions or traffic. None of this ever had to happen. It could have been easily addressed and corrected. Four years prior to producing the cobalt, jim engineers were aware of the problem with the engine switch design. Problem,an fixing the they chose to keep producing the cobalt and selling it to an unsuspecting decided to keep prg the cobalt and sell it to an unsuspecting public. Should gmbe held be able to hide behind their bankruptcy and not accept responsibility and liability for these young lives . No. These help us in standing up for what is right. New what was wrong. They knew it during the bankruptcy proceedings. Congress to pass tough penalties so that the coverups stop. Needless deaths and injuries should not be the cost of doing business. The preventable deaths will not be forgotten. It is time to stop corporate coverups. Natasha and amy will not be forgotten, and we must protect other families from these types of tragedies. Family members of the victims were present later that day during a hearing on the recalls. Testified about his agencys investigation to determine what went wrong with gms ignition switches. This portion of the hearing is 25 minutes. Chairman murphy, Ranking Member do get and members of the committee, thank you for the opportunity to testify before you today. The victims, family and friends have suffered greatly, and i am deeply sorry for their loss. Safety is nitze as top priority, and our employees go to work every day trying to prevent tragedies just like these. We worked at improving the and we havehicles reduced highway fatalities to historic lows not seen since 1950. In the case of the recently recalled General Motors vehicles, we are first focused on making sure General Motors identifies the faulty ignition switch, fixes the problem quickly and informs consumers how to keep safe. We are also investigating whether General Motors met its responsibility to address and report the defect as required by law. If it failed to do so, we will whole General Motors accountable, as we have for the last five years. Internally, we have already begun a review of actions in this case to review potential defects. Today, i will share what i have learned so far. And ntsaits investigated airbag technology. Some of the information raised concerns about airbag nondeployment. Convened an expert panel to review the data. Neither the cobalt nor the ion stood out when compared to other vehicles. The two special crash weretigation reports inconclusive. The airbags did not deploy and the power mode was an accessory. Occupants and offRoad Conditions that began with relatively small conditions where, by design, airbags are less likely to deploy in order to prevent doing more harm than good. Furthermore, [indiscernible] is not present when airbags are deployed and do not warrant further investigation. 2010, we found that the related Consumer Complaint rate for the cobalt had decreased by nearly half since the 2007 review. Based on our engineering expertise and our process, the Data Available to us at the time was not sufficient to warrant further investigation. What does all of this mean. It means that we were concerned and engaged on this issue. This was a difficult case where the tools and expertise we have used over the last decade have successfully resulted in many recalls. The tools and expertise have served us well and we will continue to rely on and improve them. For example, we have already in in advancedinvested computer tools to improve our efforts. Also means that we need to look at how we handle difficult cases like this Going Forward. We are looking to better understand how many manufacturers deal with power loss in airbags. Ways to address defectpear to be remote possibilities and we are looking at ways to engage manufacturers in all aspects of the process. Will continue to identify defects and ensure they are fixed. I want to close on one last important note. Defectsity to find requires our providers to act on good faith and in good time. Parts change and indicating potentially critical supplier conversations on airbags. Had this information been available earlier, it likely would have changed our approach to this issue. But let me be clear, both we and the Auto Industry as a whole must look to improve. I greatly appreciate the to testify before you today. Understand you just got into this position a couple of months ago. A focus on green energy and fuel cell technology. You arestand that if uncomfortable with some of the questions, you are more than welcome to ask some of the staff behind you. I believe we have a slide available or a poster here. Went to your website to see what we could learn. Have that available. This is all i could find on your website about the recall notice. No information about the broader recalls, parts, investigation, or anything like this. I cannot even read this. It simply says get rid of your car key fobs. Could you fix this website so that people can use it to get information, please . We will take those steps. Right now, consumers can go to our website and get all of the Details Associated with the recall if they go to the Search Button and select the 2005 cobalt. Can you make it easier . Make it quick . In 2005, there was a proposal to investigate airbag deployment in the chevy cobalt, correct . Yes. This is the Powerpoint Presentation made to the panel. The presentation states that there have been 29 complaints about the cobalt air baits come airbags. Is that correct . That sounds correct. Is a charge of war and tea claims being much higher than other vehicles. Do you agree warranty claims being much higher than other vehicles. That did raise concerns on our part. Likely those claims are associated with airbags. Others are likely to be associated with warning lights on airbags. Impertinent an important look at the data that we use to decide whether or not we need to look further into these issues, which is what wed do in this case. Tsa decided not to investigate. I believe this happened twice. What specific information did you have that said dont go forward . When we look at the case at the time, they look at the whole body of information. They dont necessarily rely on just one piece of information. The corp. East they relied on they determined was not enough information first was an analysis of the complaint. And the exposure, the number of those provided about the number theehicles on the road and number of vehicles on the road. When the team did that comparison, the cobalt did not stand out. It was a little bit above average, but there were several vehicles that were significantly higher. But twice employees raised the red flag on this. Wondering if you did Something Different when it occurred the second time. Did anybody ask questions of why and airbag does not deploy . I looked at the statements and saw a number of things about anybodysses, but did ask a question, was there anything else, any other reason . Hy a bag would not deploy at the crashlooked data was007, the inconclusive. Why . Because it indicated that these happened in offRoad Conditions with unbelted occupants. I am looking at reasons why airbags would not deployed. You were talking amongst yourselves, from what we understand from the powerpoint. , did you ask gm to tell you the reasons and airbag would not deploy. Raisedow concerns were at a meeting, but i do not have an answer to that specific question. Important because you are saying gm did not survive you with information, but youre provide you with the information but youre also saying you did not ask for the information. Typically, those questions do get asked when we move into the investigation phase. Where this was was the face were phase were concerns are raised. Questionsking those of automakers. Roughly half of the cases brought up are brought to , roughly half are not. We arethe things concerned about is when we engage automakers. I believe there are changes we engage automakers earlier in the process. So, in retrospect, what you would change in this whole process. Thank you. Nhtsa investigated airbag nondeployment. As he talked about, it was never able to connect the dots between that problem and defective ignition switches. When i want to know is, do they have the relative information they needed to make a fully informed determination . What did the agency believed about the connection between the ignition switch and airbag nondeployment. The Agency Mistakenly believe that the airbags were deployed 60 seconds after the power cut off. Why did nhtsa think that . That knowledge was actually from years of experience. There was a problem where airbags would go off long after the vehicle was turned off. They had capacitors in them. Those capacitors are designed to store energy. If power is lost, the airbag can still deploy. That is these on the gm service literature . My understanding is that his beast on the each of the experience. I apologize if i was not clear in my testimony. We have since found that Service Information and confirmed our information. A power loss would not stand out. You were not there, but nhtsa was basing its determination on experience. How is it that it failed to connect the dots between the airbag problem and the ignition switch problem. I believe there are two situations here. The information we had at the time indicated that there were two possibilities but in front of us. One of them was the ignition being off could have been a cause. The other one was the circumstances of the crash. In those two cases, the more likely scenario was that the crash was more likely to yield to the airbags not deploying. You said that gm had critical information that would have helped identify the defect that they did not have. What information could gm have given you at the agency that would have helped identify the real problem . I made that statement based on looking at the chronology. There were a few things in that analogy that raised serious concerns for me. The first was that there was a change relative to the ignition switch. We were never informed of that change. The second was that there was a conversation with the buyers about their control algorithm. We were never informed of that conversation. We did not have the detail on how that our rhythm works. Third, General Motors created a direct connection in their recall. If we had any of those problems, i truly believe it would have changed how we approach this. Is gm is changing a part, or they were fired to inform of that change required to inform that change . I can get back to you on that. It seems that that is critical. In your Opening Statement, you said that in order for nhtsa to make a correct determination, you need all of the information. You need the Company Based on what you know now, do you think at the time that all of this was happening, gm was acting in good faith . We have an open investigation into that question. If we find out that they were not, we will hold them accountable. I hope that you will informed this committee whether they did or didnt. Absolutely. When you expect to finish that investigation . I cannot put a timeline on it. Were getting hundreds of thousands of documents from gm. The deadline was april 3. Is not clear that they will provide all of the documents. We are making sure that they can continuously produce documents. As soon as my team can combine information in those documents, to indicate that General Motors had information, we will move forward with how to hold General Motors accountable. Thank you. With regard to the question, there is a change that we need to notify you about. I have a different part number. I dont know what the requirements are about that. We need to know what information you were reviewing. Will you please provide that information . We can provide a significant amount of documentation. We will continue to do so. I recognize the chairman of the committee. Thank you. I know you and the committee are looking to information. Thousands and thousands of pages. That continues. It looks like we will be getting some more. I wrote an act that passed unanimously. President clinton signed it into law. A major point of that was that nhtsa would get the information it needed. They would detect a trend as quickly as they could. When nhtsa considered whether to investigate back in 2007, the Early Warning data was one of the factors that was cited in the defect assessment. Correct . Like that is correct. What was the problem . The gm not report the information . Was nhtsa unable to sort through the information . We have an open investigation to determine whether General Motors failed in their responsibilities. We will definitely report to this committee the result. We looked at all the available information using an approach that we had used successfully to lead to over 1000 recalls influenced by nhtsa over the last 10 years. We used a process to look into the data and look into Consumer Complaint data. There was a variety of other information. We dug into the data and we analyzed it. We tried to see if there was a defect trend that stood out. The data did not support that. It showed that the cobalt did not stand out. We look at the special craftsmanship. It was inconclusive. This is a case where the team worked very hard to try to understand what was happening. It was not able to see significant trends or clear enough defect. What i am learning from this and where we have to go in the future is that we need to look carefully at the possibilities. We need to reconsider the way we are using these investigations. We need to continue to invest in tools. They are growing out of the watson ibm software. We must more efficiently use our resources. We have to move all of these tools forward the we have to look for opportunities for changes. You look to embark on investigation. Do you consider the number of deaths . Is there some trigger that you use to warn of further exploration . Is that one death, for jeffs, 20 . Is there some kind of standard put into place . There is not. Our goal and what i would love to be able to do is to do with the defects before theres a single death. It is the manufacturers responsibility to report these effects and get them fixed. When they do not, it is our job to find them. We do not have a simple rule of thumb. Each case is different. We have opened the investigations after one instance that it was needed. We have tried to rely on trend data. I cannot give you a specific. Lets play monday morning quarterback. Today is april 1, 2014. These problems arose over the last 10 years. What would you have done . What would you like to have your potter from gm that you did not have in the last eight10 years . What i can tell you based on the chronology is that i wouldve liked to have had information that they have changed parts on the ignition switch. I wouldve liked to have had information that they were talking to their suppliers. They appear to have concerns about the algorithm. I would certainly have liked to have had information directly linking the ignition switch defect to airbag nondeployment. As we go through our investigation, i should be able to go back and let you know if there is information. Are you sure that they did not provide this information . It is my understanding that none of that information was available. We are continuing our efforts. We want to make sure that we understand what happened. I cannot give you a comprehensive answer. My understanding at this point is that no, we did not have that information. I yield back. I will have my friend mr. Kerry assist me. The chairman of the committee showed you this picture and said he could not navigate past this page. He said if new information became available, you would get that on the website. We learned in the first if you take your car to General Motors, they will give you a loner or rental. I would call that germane and critical. I think it would be enticing to drive a 14 while they drive your car. I yield back. I received a call from one of my constituents who try to get a loaner car and said he could not have one. You could put on, take all your keys off the key ring except the ignition key. At is clearly on there. Just to be clear, the reason we did that is because safety is our priority. We are investigating the case. Safety is our top priority, which is by the first thing i wanted people to see was how to keep themselves safe. I want to be clear, that is why we have that information. I didnt want anyone out there not to understand the steps to keep themselves safe. I agree it is a good idea i will have to see if we can put in another way to point people to it. People need to know if it is safe to drive their cars. You can watch this hearing in its entirety on our website, cspan. Org. We invite your feedback on the issue of the gm recalls. 2026263400, or email comments at cspan. Org. Hi, im sarah. Im sherri. Cspanare watching the bus. The cspan bus is an interactive education center. We bring Public Affairs coverage to you and your community. Schools andted cover historical events throughout the country. Bus, go more about the to cspan. Org. Us a tweet at cspan bus. We look forward to seeing you in your community. Our issue on gm recalls continues next with Kenneth Feinberg. By michaelimony milliken. On the next washington journal, we look at the role local and state police have. Our guest is eugene odonnell, a lecturer on justice. We will be joined by marion smith of the u. S. Citizenship and immigration services. Watkins will focus on the housing act signed by president johnson in 1955. Washington journal is live on cspan every day. Our special look at the gm recalls continues now with Kenneth Feinberg. He testified last month on when the victims families will be compensated and how much they will receive for their loss. This portion of the hearing is 50 minutes. Today, we revisit the tragic at generalfailures motors that killed people. First, i want to acknowledge in my opening remarks that from my viewpoint, the ceo of general up and withtepped kurdish and conviction has confronted headon the problem thathe Corporate Culture caused it. Some see the Record Number of recalls at gm as a problem. I see it as a good sign. Second, i want to briefly say that i think i speak on behalf of all members of congress who have asked very difficult surrounding these tragic events, that while we are asking tough questions, we have Great Respect for the workers of General Motors. I would like to take this moment to thank the workers at General Motors. You are terrific, you build the cars, and you also were the victims of outrageously incompetent management. Management was the problem here, not the workers. The valukas report i have spent some time with. I find it thorough and damning. There was indifference, incompetence, and deceit among engineers in positions of important responsibility. Second, it is very clear that the culture of lawyering up and wackamole to minimize liability in individual lawsuits killed innocent customers of General Motors. I have many questions about the failures of the Legal Department today. I am also interested today in hearing from mr. Feinberg, who has been asked to put together a plan to compensate those who have suffered from these management failures. He is here independently of the witnesses from General Motors. He is appearing independently of the witnesses of General Motors, and he will exert independence in his role as he makes decisions about compensation to the many people who have suffered. And i certainly thank him for being here today in that regard. Perhaps i am more interested today in understanding how in the aftermath of this report how in the world in the aftermath of this report did Michael Milliken keep his job . I do not understand how the general counsel for a Litigation Department that had this massive failure of responsibility, how he would be allowed to continue in that important leadership role in this company. And the questions i asked today will be surrounding what he knew and why he did not know it and what kind of direction did he give a Legal Department that would allow them to do nothing in the face of the evidence they were confronting over years of litigation by people who were trying to get the attention of General Motors about the fatal defects in the product they were selling. This is one of the darkest chapters in the history of General Motors. And a mission switch an ignition switch was approved although it failed to meet gms own standard specifications for torque resistance. The ignition switch would slip from run to accessory with little more than the knee hitting the key or the car driving over a bump. The cars power shut off while it was being driven. Even for the most experienced drivers, there is nothing more terrifying than a loss of power while moving at high speeds. I can only imagine the sheer terror of the individual driving these vehicles the minute the ignition switched out of run. What those drivers did not know as their cars swerved across lanes on the hit walls, inclines, ravines and trees, was that the one thing they couldve saved their lives, the airbag, was not going to deploy because the power to the airbag itself was shot off. If after a few crashes gm was able to understand the ignition switch problem, maybe more lives could have been saved. As the volukas report points out, gm failed to take action or acted too slowly for over a decade. Two critical factors have been identified as reasons for this. Gm failed to understand how its cars were built. Gm failed to understand how its cars were built. Incredibly, the official findings pin the blame for the delay to recall the scar on the fact that gm did not understand how its own car was built. The same engineer who approved the original ignition switch approve the part in 2006 and did not inform any person at gm and did not change the part number. People died. Millions more were put at risk because gm did not understand its own car. 54 frontal impact crashes and more than a dozen fatalities later, we find ourselves this morning for a second hearing on this issue. It is truly a dark chapter in the history of General Motors. We need to make sure that the volukas report is the whole story. Is the volukas report accurate, is it definitive, or are there missing pieces . The ceo of delphi is with us today and it is my hope that he will help this subcommittee understand there is Additional Information that provides us with more of a complete picture. I hope this testimony today will be forthcoming, and not circle the wagons. We need to know what happened here, and delphi has a responsibility to the families and survivors to provide a complete picture. If delphi knows more than the volukas report identified, now is the time to make those known. The report offers a strong timeline. I would like to explore whether delphi was fully cooperative. In the report it states the delphi had numerous documents and other relevant material they did not supply. Chairman, i am appreciative that we are holding this hearing. All americans deserve to know that for over a decade, General Motors and delphi failed to demonstrate a basic level of corporate confidence. There will be a discussion of whether a changing of laws needs to be necessary. Thank you, chairman. Our first witness today is and our first panel consists entirely of Kenneth Feinberg and ms. Biros, who are in charge of the fund that will compensate many of the people who have suffered tragically as a result of gm failures. We look forward to your testimony, and thank you for being here, mr. Feinberg. I want to thank the chair for her vigorous leadership in this matter. I want to thank all the members of this subcommittee. I particularly want to thank senator blumenthal and his staff. They provided some valuable constructive suggestions as to what this protocol should look like, and indirectly i must thank the senator because the senator was critically important and very instrumental in the design and administration of the 9 11 Victim Compensation fund, which proved to be a precedent for much of what is in this protocol. I want to publicly thank the senator for his work many years ago in the drafting of the 9 11 Victim Compensation fund. Accompanied by miss camille by rose, who has worked at my side in the drafting, design, and administration of the 9 11 fund, the bp oil spill fund, one fund boston marathon, the Virginia Tech memorial fund, etc. She is also here to answer any questions the committee might have about the administration of this program. Its a bit premature to be talking about this program because we do not begin receiving claims until august 1, a few weeks from now. We are right on track. This protocol will form the basis for the submission of claims. I think lawyers around the country for their input as to what this form might look like. I think various nonprofit foundations interested in automotive safety for their input, and i also must say, i think General Motors from the top down. They have been very helpful and constructive interacting this protocol. This compensation protocol is entirely our corrective responsibility. I dont think there is anybody who provided this input that is entirely satisfied with all aspects of the protocol. I am optimistic that as the chair pointed out in her introductory comments, we will compensate. The innocent victims of this tragedy, that is the purpose of this protocol and i am confident it will succeed. Claims can be submitted for the next five months through august 31, december 31. We will stay in active work into 2015, processing claims that may come in late in the year. Youre not going to disappear on december 31. We are not going to disappear on december 31. There are some interesting features of this program that i can highlight in one minute. It is uncapped. We are authorized to pay as much money is required. The bankruptcy of gm is no barrier to compensation. If there were accidents that occurred before the bankruptcy, they are as eligible as accidents that occurred after the bankruptcy. There are some people who already settled their claims years ago was General Motors, and signed a release that they will not sue. They can come into this program. If under our compensation rules of they are entitled to additional compensation, they will be paid. The contributory negligence of the driver speeding, cell phone texting while driving, intoxication irrelevant. We are not looking at the driver or the circumstances of the drivers negligence. We are looking only at the automobile to determine whether or not the defective ignition switch was the proximate cause of the accident. You never know on these programs. We have our fingers crossed and we are cautiously optimistic. We build on the success of past similar programs. I believe that beginning august 1, we will be ready as the chair and others have insisted to begin receiving claims. We are finalizing the documentation, which we will deliver to the subcommittee. But we will be ready to receive claims. We will pay those claims within 90 to 180 days after the claims are deemed substantially complete, and finally, we have a very pervasive Notice Program to reach out to all eligible claimants, all those who think they might be eligible. We are determined to reach every driver or engine victim to make sure they know of this row graham. We are confident that the program will work as intended. Thank you. A couple of questions. When they hired you to administer this Compensation Program, did General Motors lay out any limitations on the program cost scope . If so, what were the limitations . The only limitation they really laid out was the limitation that only certain eligible vehicles are subject to this program. As the chair knows, in bp there were limitations in my jurisdiction. In 9 11, as congressman blunt and others drafted that legislation, there were limitations. The only limitation in this program that gm insisted on were that only the eligible vehicles listed in page three of the compensation protocol are eligible for consideration. Did you suggest any classes or coverage that should be included the General Motors rejected . No. I am not an automotive engineer. I asked General Motors, what are the vehicles . What is the definition of an eligible vehicle that could give rise to a valid claim . This was their response, which is reflected expressly in the protocol. If the airbags did not deploy but should have, if there is any evidence that the seat else pretension ours worked as designed, under your protocol, the victim is not eligible . That is right here at the victim is not eligible if the power was on and the airbag did deploy. If the airbag deployed and the seatbelts were working, then a fortiori, the likelihood that the ignition switch could have been in the off position causing the accident is not possible. We concluded and i concluded that if that deployment renders the claim in eligible. Airbag nondeployment or a claim in which the victim or his or her family say, we dont know whether the airbag deployed or not, eligible. Filed a claim, and we will work with the claimant in that regard. If the airbag did not deploy, you are eligible if you are in one of the cars on the list . Exactly. Regardless of the seatbelt . Exactly. The total decision here is what car it is, and whether or not the airbag deployed . And or whether the seatbelts deployed. If the seatbelts deployed, the power is on, it could not have been the ignition switch. Are you talking about whether or not a seatbelt is on . It is not the seatbelts per se, it is the pretension ours, which are electronically controlled. If they were operational, it is unlikely that the cause of the accident was the ignition switch. You are saying if the pretensioners were working, there was not a shutdown of the electrical system that would have prevented the airbags from deploying. Correct. What if there is a frontal crash and the airbag does not deploy, and seconds later there is a rear crash and the airbag is deployed . File the claim. If there is a frontal crash and the airbag did not deploy, we want to look into that claim. You are open to looking at each situation. That would be a situation where the airbag did deploy, but not until the second crash. I want to make sure everyone is clear that even if your airbag did not even if your airbag did deploy, it would depend on the facts of the case. I would like to take a look at that claim. This is the issue. The switch goes off and on easily. It slides off easily, it slides back because there is not appropriate torque in it. Things that bump it, move it just as easily as writing off the road could bump it, a frontal crash could move it from off to on, correct . Theoretically you are correct. I have two answers to your hypothetical. First, it is highly unlikely that that circumstance occurs. I guess it could buried it is highly unlikely. What i want to avoid with this program is being inundated rice thousands of by thousands of claims where the airbag deployed, making it extremely unlikely that it was the ignition switch causing a delay in getting money out the door to the vast number of claimants which clearly can demonstrate airbag nondeployment through police reports, photographs, etc. The whole key to this program is getting money out the door as fast as possible to eligible claimants. That is why the airbag deployment provision in the protocol is designed, frankly, to discourage thousands of people from filing a claim when in the overwhelming number of cases, airbag nondeployment is a certain step in the direction of finding eligibility. I have questions about the amount of money that you have to spend, and also about punitive damages. I have a feeling my colleague will answer these questions. I will leave those questions to my colleague and turn it over to the senator. Thanks for being here. I dont know that it is premature to have this discussion. I think this is the perfect time to have this discussion. I want to go back to what the chairman was asking you. You are saying there is no scenario where the key could have gone from run to accessory, have an accident occur and still have the airbag deployed . Thats right. Senator mccaskill raises a hypothetical situation, but its not the type a situation that is likely that would justify drafting a Compensation Program that would invite anybody with the airbag deployed to file a claim. It took 10 years to figure out what the problem is and you are telling me that scenario cannot happen . It is so rare. You dont want to discourage claims from being filed by the overwhelming cases where airbag nondeployment is a major step in the direction of finding eligibility. You said you will compensate all innocent victims. Let me give you a scenario. Suppose im driving a cobalt, and the airbag does not deploy and the key goes from run to accessory. I walk away unscathed. But i destroy the car. Am i compensated . That is a litigation matter. You are not compensated under a Protocol Limited to death and physical injury. You may very well be compensated. There are thousands of lawsuits pending on economic damage to the car, diminished value of the car, but that is not the scope of this death and physical injury program. Why would you stop there . Isnt a loss a loss . In the very beginning, in my conversations with lawyers representing injured and deceased victims, it was always understood that this program, like 9 11 and like one fund Boston Common is limited to death and physical injury. Im not saying those folks dont have a valid claim. They just dont. Come to this program come to this program. Is there a way to appeal this decision, that a loss is a loss in this case . In the courts. Can they appeal to gm . I guess they can appeal to gm as well. I dont know if you have Performance Indicators moving forward on what you and your staff will be based on your pay, it is important there is transparency of your compensation, and knowing here that you are being compensated by gm, a think transparency is important. Will you or your staff be paid based on a number of claims made or the number of that nature . Absolutely not. The me talk you about bp. Previous administrations of the bp oil spill Victim Compensation fund did receive some criticism. From some of the stakeholders that you are working for the oil companys interests, instead of being independent. I will say. How do we know that you will be accountable to the victims . Bp, when the criticism came my way, i asked former attorney general Michael Mukasey of the Bush Administration to review my whole compensation, the whole way we went about being paid, my independence, and he wrote an opinion letter which i made available, making it very clear that i was independent and doing the type of work i was asked to do. The only real way that you blunt criticism that is sure to come about my compensation the only way is how fast you get money out the door to eligible claimants in a generous way so that they can see that the conduct of this program and the professed independence is back up by the way these claims are being processed. Until these claims begin to come in and people see how they are being processed and how they are being found eligible, i will always confront that criticism and thats the way you have to address it. Thank you. Thank you very much, chairman mccaskill. Thanks to both of you for being here. The investigation into the General Motors ignition switch defect issue paints a picture of a company that for years showed indifference in the fact of mounting evidence, of risk and of danger. I believe there are still questions to be answered, and a key point for victims, mr. Feinberg, and one of the reasons we are having hearings today are questions about how the fund and claims will work. I greatly appreciate the fact that the new gm ceo has stepped up and taken this headon, not only with the recalls but also with setting up this fund and working with the victims. Something very bad happened here, and we all know that. As you know, mr. Feinberg, only the results and history will judge whether there is true justice for these victims. Im glad the chairman held the steering so quickly after our last one so we can continue to be informed and ask questions. In my case, i have a victim, a very young woman named natasha. She is out of minnesota. She was only 19 years old. She died when her car went barreling at 71 Miles Per Hour into a grove of trees. She was a hockey goalie. She had a lovely little note she wrote to her dad right before she died about how she always knew he had her back and he was there. All they want now is to make sure that gm has their back. My first question is about these young victims, since many of these cars involve younger drivers. I am a saturn driver. I still have a 15yearold saturn, and the chevy cobalt, that was the kind of car that she was killed in. Can you ensure that there will be fair compensation for these younger victims when it is often harder to assess what their earnings potential will be . Absolutely. Like 9 11, where many young people died on the planes at the World Trade Center and pentagon here even younger people we will make sure that compensation is generous and it is adequate and appropriate. In the protocol lays out in some detail how we will go out compensating nonwage earners who have not yet begun a professional career. We also lay out rules that allow any younger victim or anybody who has died in the crash or who was terribly physically injured to come in and see us, and we will develop a tailored Compensation Program, what i call track b, that reflects the unique circumstances of those younger people. We will be glad to do that under the rules of the protocol. You estimate a lower Participation Rate for young people because you have not seen this in the past . No. Concerns have been raised about some safety groups about the documentation required, that it may be too burdensome. Some say it may be difficult to prove that years ago and ignition switch failure caused the crash. How do you respond to that . Is a lot less burdensome than going to court to prove their claim. There is a provision in this protocol that makes absolutely clear that if anybody files a deficient claim, they cannot find the documentation, we will work with that claimant to try and cure that deficiency. There are various ways, a menu of options as to documentation, contemporary police report, the car, the black rocks in the car, insurance reports, warranty and maintenance reports, photographs. Perhaps one of the best examples of collaboration, senator mccaskills example of showing a photograph, a front end collision and no airbag deployment. That case is well along the way to eligibility. We will work with the claimant and no airbag deployment. Now, that case is well along the way to eligibility. So well work with the claimant to make sure that even though some of these claims are very old, the accidents occurred over a decade ago. Well try and reconstruct that documentation. Along that point one last question. Under the terms of the 2009 bankruptcy, g. M. Is technically free from liability for injuries and deaths that occurred prebankruptcy. Can you assure the plaintiffs that they will have equal opportunity to compensation regardless of whether and when g. M. Went through bankruptcy . Sglverages yes. That is absolutely assured and g. M. Has acquiesced to that recommendation. Thank you very much. Senator blount. Thank you, chairman. The chairman and i are obviously she mentioned in her first comments we have a number of g. M. Employees in our state. We are grateful for those employees. And the work that they do. And concerned about anything that reflects on their products, their future opportunities, their ability to make the good living that they make with the hard work that they do. And so looking at this, is important to us. Its important to the country. Mr. Feinberg, i appreciate your comments. Certainly when we set up the model after 911, the idea is the one you continue to pursue that victims are not subject to which judge theyre assigned to. That you dont have cases handled one somewhere and one way somewhere else. They still have the legal option if they want to take it. But if they want the assurance that these cases are going to be handled in a way that has a structure, they have that from you. Now, in that structure, as i understand it, when it comes time to a settlement, you have the ultimate authority on what that settlement would be, am i right in that . That is correct. The program is as you just pointed out entirely voluntary. No one has to come into this program. And if they do come into the program, we will determine their eligibility and if theyre eligible, the amount of compensation. And only as with 911 as you know, only after they know what it is theyll receive, how generous it is. Only do they then agree and there is no appeal from my determination and g. M. Cannot cannot react reject our final determination. They have agreed in advance to abide by any final decision that is made. And am i right in believing that g. M. Then has no input on what your final determination on an individual case would be . They can just like the claimant, they can provide whatever information they want in advance of my determination to complete the record. But once i have that record, ive heard from the claimant, ive heard if g. M. Has anything they want to add, once we make that determination, they have no say, they have no right to appeal. They have no right to secondguess. They are bound by that determination that we make. And at what point do you think youll begin to deal with some of these individual cases . August 1, the claims start to come in. And under the protocol, once the claim is deemed substantially complete, once we have the documentation, then within 90 days, we will begin to process the claims, authorize payments, and invite the claimant to accept that compensation. And you said earlier you were grateful to g. M. In helping draft the protocol in addition to determining eligible vehicles, was there anything that they added to that protocol or help with in that protocol . Yes. I asked g. M. , and plaintiff lawyers, and nonprofit foundations, the entire protocol, what do you think about the dollar levels . What do you think about the process, the procedures . Nd i must say that General Motors, from the c. E. O. To mr. Milken and down the line, extremely cooperative, constructive. They say wanting to do the right thing. I have only appreciation for eneral motors in assisting ms. Byros and myself in drafting of the protocol. I doubt anyone likes all of it except ms. Byros and myself. But they provided valuable input and im very grateful for them. Thank you for your leadership on this and so many other funds like this. And i wish you well and certainly everybody involved as you move forward with trying to deal with these claims in the best possible way. In terms of the company, better late than never. But for those people who were dramatically impacted and have a loss that theyll never recover from, as senator kolb chur was talking about, that note from a daughter to her father is a sad last and only thing to have of those last moments of that young girls life. Were going to be very interested as you work your way through this. And i think the company made a good choice and look forward to watching as this progresses. Thank you, sir. Senator blumenthal. Thank you, madam chairman. I want to thank you for having this hearing which i think is very important. I thank mr. Feinberg for your work, very challenging work in this area. I have only five minutes here but you spent more than five minutes, actually more than five hours in talking to me and my staff and we hope we can continue to work on many of these very profoundly important details. But the devil here is in the details. And in the discretion that you will have. I want to ask you about one area of what i hope is within your discretion. On june 30, of this year, when you announced the details of your compensation protocol, g. M. Announced the recall of more than eight million cars hat had ignition defect defects, defective ignition switches. The company acknowledged those defective ignition switches. Beyond the models involved in your Compensation Fund so far caused at least three deaths and numerous injuries. Added to the list of the Chevrolet Cobalt and saturn ion, we have multiple other models of chevrolet, oldsmobile, pontiac cars, g. M. Has now recalled more than 14 million cars in 2014. Many of the reasons for these ecalls are defects in the same part, the ignition switch. That killed people and injured many in the matter that you are providing your Compensation Fund. I happen to believe that the Compensation Fund has to be expanded. I believe strongly that your fund must be extended to include those victims of death, injuries, and damage, in those other recalls. Would you agree with me . I cant agree or disagree. I have no jurisdiction, senator, and i can be very clear on this. Just as with these other Compensation Programs, where policymakers tell me in drafting your protocol, this is what is eligible. I have no authority to go beyond the list of automobiles listed in this Compensation Program. Would you recommend to g. M. That it expand or extend the fund . That is entirely up to g. M. That is entirely up to g. M. Im not an automotive engineer. And all i can say, senator, is that when g. M. Asks me to byros a fund, from ms. And myself to administer that fund, they made it very clear that the only models where this problem and the context of the problem gave rise to this special compensation are these models. As with 911 and with b. P. , i must abide by that delegation of authority. Let me move then to another topic. I can tell you about instances and the airbags deployed the crashes resulted from this tee effective ignition switch. The hypothetical scenario that weve been discussing here is a real fact. Ive talked to people who drove those cars. They stalled. And they were able to turn them on. And i can present to you specific instances of crashes. Will you consider them and make refunds . I want to see those claims. Ive talked in the last e nths to automotive engineers to lawyers to g. M. Officials. I think it is such an unlikely possibility despite but if it is, i would like to see that claim, i would. Let me just close with this thought. And inspired to raise it by the observation made by chairman mccaskill. Bout the laurg here. Lawyers typically are supposed to be the corporate conscience. Theyre supposed to be the ones who make sure that corporations comply with the law in spirit and letter. Here, the lawyers for g. M. Tually enabled coverup, concealment, deceit. And even fraud. And i believe, although we ution the word alleged as lawyers all the time, that the criminal investigation now under way by the department of justice will find culpability on the part of those lawyers. Would you agree with me as someone who has been a member of this profession, and done it with great distinction for a long time, that the lawyers here failed the public and failed g. M. . I agree that the lawyers work in the Public Interest or should. I dont know enough about the underlying circumstances that give rise to this to make an official ontherecord decision about the lawyers in this case. I just dont know the answer to that question. Thank you, madam chairman. Thank you, mr. Feinberg. Senator baldwin, welcome. Senator baldwin is here as a special guest of this committee today. And we welcome you. And welcome your questions. Thank you, chairman mccaskill and Ranking Member heller for allowing me to join you today. Im not a member of the Commerce Committee. But i have had discussions with Family Members and let me just share by way of an Opening Statement that on the night of october 24, 2006, three girlfriends, natasha wigle who you heard about earlier from senator klobuchar, Amy Rademacher and megan kearns were returning from a trip to a walmart in st. Croix county, wisconsin. One of the border counties between wisconsin and minnesota. 205n re heading east on in a Chevrolet Cobalt that lost power and into a telephone pole and the airbags never demrade. The accident killed natasha and amy and left megan seriously injured. As you heard from senator klobuchar, natasha was a goalie on her hockey team. Her parents could count on one hand the number of times they had seen her in a dress. The tomboy also had an artistic side that impressed her art poetry. With her the first thing that comes to machers amy rade friends and teachers remember her is her last, inif he can shugs. When she got going her whole class couldnt help but join moo in. She dreamed of one day opening a day care to work with kids professionally. Officer keith young, a member of wisconsins state patrol technical reconstruction unit was one of the first officers to arrive on the scene that night. A 20year accident construction veteran, officer young was able to correctly identify the cause of the crash. That the ignition had been turned from the run to the accessory position. Shutting off the cars engine and disabling the airbags. Officer young sent his report to the national Highway Traffic Safety Administration, and subsequently to g. M. Despite the careful analysis, neither ntsa or g. M. Took action. For the parents of these wisconsin girls this hearing of course is of little solace. Nothing we do here can repair the damage thats been done. The best we can do is work to ensure no other family has to endure what they have. So i again thank the chairman and Ranking Member for allowing me to join this. Mr. Feinberg, i have for you only one very simple question i hope. One of the victims in the october 2006 accident was sitting in the back seat of the cobalt. Her family expressed concerns to my staff in preparation for this hearing that g. M. Did not consider this victim one of the official 13 victims because there is no back seat airbag that could have then failed to deploy. Mr. Feinberg, can you shed some light on if the back seat passengers will be included in this Compensation Program . The answer is absolutely yes. Not only the back seat passenger, pedestrians are included. Occupants of a second vehicle that collide with the defective vehicle, all included. All can file a claim. Based on your summary, it sounds like a very eligible claim. Whether youre the driver, a passenger, a pedestrian, or the occupant of another vehicle, all eligible to file under this program. Thank you. Thank you, senator baldwin. I just have one question. And then we need to move on to the other panel because we have a series of votes coming up at midday. Mr. Feinberg, theres no punitive damages in this. And this is very difficult and gut wrenching decision for laurgs. So i want to make sure i understand this procedurally. If, for example, a victim from missouri is 81 years old, obviously her damages in terms of compensatory are going to be smaller because she was near the end of her life. Her case is such that i think factually there would be a strong case for punitive damages. If she files a claim, and gets an award from you, is she then obligated to take that award or can she leave it on the table and allow her attorneys the opportunity to litigate the issue as to whether or not her claim could still be heard because of misrepresentations that were made in bankruptcy around the g. M. Bankruptcy filing . If i understand your question, the claim will the compensation will remain on the table for 90 days. During which time the claimant can decide whether to accept that compensation, release her right to litigate for punitive damages, or decide nope, i think im going to go the litigation route and try and get not only compensatory damages but punitive damages as well. That is entirely up the option of the claimant. Its really difficult gut wrenching choice for a lawyer, which i know you appreciate. Based on your background. Because typically the bar to overcome, a bankruptcy decision, as to what claims are discharged, is difficult to overcome. Because you have to show that there was fraud. And thats a high bar in the law. On the other hand, it seems hollow, i think, to many of these victims families that just because their loved one was at a certain age or at a certain income level, General Motors will really never feel the brunt of what punitive damages are designed to do. And that is to penalize a corporation for exactly the kind of conduct that was present at General Motors. Im sure you acknowledge this is a very difficult decision for these families. I do acknowledge that. Now, of course, you and i can agree that if a claimant decides that 100 compensation leaves open the question of a punitive damage verdict against g. M. , there will certainly be some lawyers and some claimants who will opt to seek punitive damages. So its not as if a claimant who comes into this fund and decides to accept full compensation, its not as if there is no option for somebody else to go and seek those punitive damages. I think one way or the other, your hypothetical is true, senator. Somebody is certainly going to go after g. M. For punitive damages. If just under the hypothetical wouldnt be this claimant. I understand. Who decides i want 100 of this money right now. I understand. And i just wish that we could leave this open longer so there would be time for that issue to be litigated. So that lawyers were making their advice based on what decisions the court had made in regard to this fact pattern. You know how long how long that would be. If there is going to be litigation over punitive damages, youre talking about years and years of uncertainty in that regard. I do understand that. Thank you, mr. Feinberg. Thank you. You can watch this he tire hearing with g. M. Victims compensation advisor Kenneth Feinberg on our website. Cspan. Org. We invite your feedback on this issue spotLight Program on the g. M. Recalls. Call 2026263400. Or email comments cspan. Org. Here are some of the highlights for this weekend. Friday, on cspan in prime time, well visit important sites in the history of the civil rights movement. Saturday night at 8 00, highlights from this years new york ideas forum. Including cancer biologist Andrew Hessel and on sunday q a with new york congressman Charlie Rangel at 8 00 p. M. Eastern. Friday night at 8 00 on cspan2 in depth with writer and religious scholar reza oslin. Sar after words, ben carson, retired neurosurgeon and sunday night at 11 00 p. M. Eastern Lawrence Goldstone on the compensation between the Wright Brothers and glen curtis to be the predominant name in manned flight. American history tv on cspan3 on friday at 8 00 eastern, a look at hollywoods portrayal of slavery. Saturday night at 8 00, the 200th anniversary of the battle of bladensburg and the burning of washington. And sunday night at 8 00 p. M. Former white house chiefs of staff discuss how president s make decisions. Find our it will vision schedule one week in advance at cspan. Org and let us know you what think about the programs youre watching. Call us at 2026263400. At comments c span. Org. Community Partnership Annual convention at 11 00 a. M. Eastern. Speakers include sister simon compel, executive director of network and author after nun on the bus. At 2 00 p. M. Eastern the Brookings Institution hosts a discussion on the conflict etween russia and ukraine. Our special look at the g. M. Recalls issues continue with michael millikin, g. M. Executive Vice President and general counsel. He testified last month where he apologized to the victims families and explained what action g. M. Was taking to prevent future innigs switch problems. He was joined by the companys c. E. O. March yea barra. This portion of the hearing is 45 minutes. Members of the committee, before i begin i want to say those who lost loved ones and those who are injured im deeply sorry. I know we as a company and i personally have a responsibility to make sure this never happens again. Im the general counsel of at General Motors company. I have worked for g. M. For 37 years. Prior to that, i was an assistant u. S. Attorney and before that, i clerked for the honorable vincent j. Brennan of the Michigan Court of appeals. As you are aware, the investigation conducted by Anton Valukas revealed the failures behind the ignition switch recall including failures on the legal staff. When ms. Barra testified before this committee on april 2, a number of you, including you, chairman mccaskill, raised serious and important questions about the performance of the legal staff. And our responsibility in this tragedy as general counsel, im ultimately responsible for the Legal Affairs of the company. And im here today to answer your questions. I first learned about the cobalt ignition switch defect during the first week of february of this year. I immediately took action. I wish i had known about it earlier. Because i know i would have taken action earlier if i did. We had lawyers at General Motors who did not do their jobs. Didnt do what was expected of them. And those lawyers are no longer with the company. I have taken and will continue to take steps to make sure Something Like this never happens again. The valukas report contains detailed recommendations for how the legal staff can improve. And serve an even greater role in meeting g. M. s commitment to safety. Im assuring the implementation of each and every recommendation. And i have made and will continue to make other changes to help improve. I have directed that before any settlement or trial of a case involving a fatality or serious Bodily Injury that the case be brought to me for my personal review with a focus on open engineering issues. Ive reorganized the legal staff to foster sharing of information and the identification of emerging trends. Including vathe a senior attorney to be the chief Legal Advisor to jeff hoyer, Vice President of global safety, with a direct reporting line to me and a dotted reporting line to mark royce, executive Vice President of global product development. Ive supplemented existing legal sources within with attorneys from two outside law firms to make sure that we have the proper level of engagement. Ive also appointed a well respected outside law firm to conduct a zerobased review of our litigation practices. Ive met with the entire u. S. Legal staff to discuss the valukas reports findings and to set High Expectations for the staff Going Forward. These changes and others will result in Greater Transparency and information flow on issues of safety within the legal taff, as well as the company generally. And im committed to make sure that i and g. M. Senior Management Team have a full line of sight into all safetyrelated matters. G. M. s legal staff is comprised of hardworking and dedicated professionals of the highest integrity. They strive daily to help global g. M. Achieve its business objectives in a lawful and ethical manner. They have expressed sincere and deep disappointment and regret because of the actions and inactions of some individuals within the Company Including some on the legal staff who failed the company and our customers. The g. M. Legal staff is dedicated to helping g. M. Become the leader in automotive safety. We now have to correct our mistakes. And we are. But this is only the beginning. All of us at g. M. Are committing to seth a new Industry Standard for safety, quality, and excellence. We must do better. We will do better. I am personally committed to this. Thank you. Thank you, ms. Barra. Chairman mccaskill, Ranking Member heller, and members of the committee, when i first appeared before you, we were in the early stages of the ignition switch recall. I promised you we would get answers. And be fully transparent in what weve learned. I also said i would not wait to make changes. Today i worked to fix the mistakes that led to the ignition switch recall are well under way. As a result, we are building a Stronger Company that places customers and their safety at the center of every aspect of our business. In a town hall meeting before thousands of General Motors employees and several thousand more around the world jay satellite we accepted responsibility for what went wrong. I told the men and women of g. M. That our actions would be guided by two clear principles first, we would do everything in our power to make sure this never happens again. And we will do right for those who were hurt. And it is on this point i want to begin. I want to recognize the families who lost loved ones and those who suffered physical injury because of these mistakes. To each of them i extend my and our g. M. Employees sympathy. We will not forget them. Nor the special responsibility we have to them. We are committed to treating each of them with compassion, decency, and fairness. That is why ken feinberg will independently administer a Compensation Program. Mr. Feinberg has talked about his Compensation Program. It is, however, worth noting that he has complete and sole discretion over all compensation awards to eligible victims. And this is very important. There is no cap on this program. As i stated earlier, we want to do all that we can to make sure this does not happen again. We created this Compensation Program as an exceptional response to a unique set of mistakes that were made over an extended period of time. The valukas report was only a start and many changes were in motion even before we received the findings of of the report. I will use the reportaries findings and recommendations to attack and remove the information silos wherever we find them and to create an organization that is accountable and focused on customers. Im committed to acting on all of the recommendations contained in the report. Actions we have already taken include elevating safety Decision Making to the highest levels of the company. Ive created a new position, Vice President of global safety. He has full access to me. We removed 15 employees from the company. Some for misconduct, and incompetence. Others because they didnt take responsibility or act with a sense of urgency. Weve instituted a speak up for Safety Program to encourage and recognize employees that bring issues, potential safety issues forward quickly. And weve added over 35 investigators to identify and addressed issues much more quickly when they relate to safety. Weve aligned the legal staff to help assure Greater Transparency and information sharing among the staff and across all Business Units around the globe. And most importantly, we created the product integrity organization. Which brings a complete Systems Engineering approach to the safety of our vehicles. Overall, we are dramatically enhancing our approach to saflte. You can see it in the aggressive stance we are taking on recalls with the redoubling of our efforts. We are bringing greater rigor, discipline, and urgency to our analysis and Decision Making. We are mining every source of Data Available to us from the factory floor, warranty information, customer calls, legal claims, and social media. We are not waiting to see if a trend develops or updating spreadsheets. We want our customers to know when we identify an issue that could possibly affect their safety, we will act quickly. Yes, we have recalled a large volume of past models and a result of our exhaustive review coming out you have also conducted 12 recalls of less than 1000 vehicles in four of less than 100 this year. This demonstrates how quickly we are reacting when we see a potential issue. I also know that the recent efforts and the current frequency of recalls have garnered considerable attention. Lacing the highest value on or customer safety is what our employees want to be known for. We want to stand as a company that is setting the new Industry Standard for safety. Our employees will not forget what led to the ignition switch recall but they also dont want to be defined by it. After my town hall, i could hear it in your voices, i could read it in their messages. Theyre all in to make this a better company. I believe in them and together we have been working hard over the last few months to address the underlying issues that caused this problem in the first place. Been at town hall, i have inundated with calls and emails him employees telling me they are more motivated than ever to make gm the best possible company for our customers. This is our mission and it wont happen overnight, but i can tell you we are holding each other accountable to do exactly that. E are 100 committed i appreciate the opportunity to be here today and i welcome your questions. Mr. Oneill, thank you for being here. Thank you. Chairman mccaskill, the Ranking Member and members of the subcommittee, thank you for inviting me here today to testify. I am the chief executive officer and president of delphi automotive. First and foremost, on behalf of myphi, i want to express profound sympathies to the victims and their families. People were hurt and lives were lost. We must Work Together to avoid tragedies of this nature Going Forward. The subcommittees work is an important part of that effort. Members of the subcommittee, i appreciate the opportunity to address the important issues that youre considering. We fully support your efforts. I would like to discuss three main points. First, delphis efforts to provide Replacement Parts and support General Motors in connection with the recall. With theur cooperation subcommittee and other governmental bodies as well as gm am in third the review and reinforcement of delphis Safety Policies and procedures. My first point, i would like to provide some information pertaining to delphi postured a reduction of Replacement Parts for General Motors. The vehicles that were recalled were not in production several years ago. As a result it has been a Monument Task to build over 2 million switches in a matter of months. We have installed three new production lines and trained additional workers. At this time we have shipped over one million new switches and were on track to deliver more than 2 million switches by the end of august. We have done all this so that consumers can have their vehicles repaired by General Motors as quickly as possible. A second point is that delphi fully supports the subcommittees efforts as well as those of the house energy and Commerce Committee and other governmental bodies. Our support has included conducting an exhaustive review and providing relevant documents and meeting multiple times with the subcommittee and federal agencies. In addition, we have cooperated with General Motors in the recall and its investigation and our cooperation includes entering into a reciprocal document sharing agreement and we have provided relevant documents and of course with that agreement. , we have conducted a thorough review of our current policies and procedures related to product safety which we believe are robust and which we are continuously working to improve. For example, and at my direction, we have reinforced our Global Engineering team on the importance of raising safety concerns so that they can be handled roughly. We have strengthened our procedures to ensure that safety concerns are communicated across all relevant functions within our company, and that includes reports to our Senior Management and to our customers. We are committed to acting upon all such concerns in a timely manner. The industry has created a new standard to focus on how these complex Safety Systems Work Together instead of looking at safety on a part by part basis. We support this new standard and given what we have learned from these tragedies, the new standard should be very helpful Going Forward. A written statement provides Additional Details and i will be pleased to address any questions you may have. Again, thank you for this opportunity to testify today. Mr. K you, mr. Of deal oneill. Chairman mccaskill, Ranking Member heller and members of the committee, thank you for having me here today to testify about the cobalt ignition issues. , generalof this year motors board asked me to determine why it took so long to recall the cobalt and other vehicles that contained the faulty ignition switch. My explicit mandate from the board was to provide an unvarnished report on how and why this occurred, pursue the facts wherever they took us, and to put those facts into a report. That is the report which we submitted to the board. General motors board also directed me to make recommendations drawn from the facts to help ensure that this did not occur again. Unfettered was given access to General Motors witnesses and to their documents. We interviewed more than 230 witnesses and conducted over 350 total interviews. Some of those interviews lasted over two days. The collect we collected more than 41 million documents, all in an effort to find out why the cobalt recall was delayed for so many years. In that research in terms of the investigation, we looked at every ceo, we looked at all of the engineers, we used search so no one was exempt from that review. I will not summarize the report, you have it. I will however note that among the issues we specifically examine are the issues that are the topic of this hearing. Accountability and Corporate Culture. We ask questions of dozens of witnesses from Top Executives to line engineers about these topics. We examine the decisionmaking process is that related to the ignition switch issues and whether there were broad cultural issues that may have contributed to the delayed recall. The story of the cobalt is one of a series of individual and organizational failures that led to devastating consequences. Tookghout the decade it till motors to recall the cobalt, there was a lack of accountability, a lack of urgency, and a failure of Company Personnel charged with ensuring the safety of the companys vehicles to understand how General Motors vehicles were manufactured. In our report reviewed these failures including cultural issues and that may have contributed to this problem. Boardsal motors request, we provided recommendations to help ensure that this problem would never occur again. Im happy to take your questions. Thank you. I want to say to the committee, many members of the committee have worked very hard in preparation for this hearing. So we can try to get two rounds of questions in before we have to leave for boats. Mr. Milliken, i want to spend my time on my first row with you. I want to make sure everybody understands what punitive damages are. Four lawyers, that is a blinking red light. And you mr. Belugas will confirm that punitive damages in our system are designed to punish corporations. Conduct that is outrageous and egregious. It is a method by which justice can be done by punishing bad behavior. Atattern was emerging General Motors for almost a decade about these cars. There was some confusion on the part of at least one engineer. 2010, yourber of lawyers this was not the plaintiffs lawyer that was out there making a frivolous lawsuit. Saidlawyers that you hired you are possibly subjective subject to punitive damages over the way you have handled this problem in this automobile. That was in october of 2010. I believe you were general counsel been, correct . , in july 2011, your that there is a potential for punitive damages because of this factual scenario. Are also general counsel then, correct question mark at that point in time, lucy Clark Authority in july of 2011 was general counsel for north america, correct . I believe she began in that position in march of 2011. Thinking it was 2012, but i could be wrong. 2012, anotherl of one of your outside lawyers that youur department were subject to punitive damages. Which could be millions of dollars for corporation the size of General Motors. FactClark Authority was in general counsel for north america. In april 2013, almost the same time you had the bombshell dropped on you in the definition in that deposition , showing the switches had been switched out, the part had been change, once again you are warned about punitive damages. As a company, that is correct. See you have a legal obligation legal obligation to report it to the securities and exchange commission. Did you ever do that about this issue . Andhe issue of this product the problems surrounding it, have you ever reported to the sec . Ot your Legal Department your Legal Department knew it. Am talking about from the time i knew forward and excluding that, before that, no week have not. Subsequent to that we may have made a filing with the sec about the ignition switch recall, that is correct every what about the legal obligation to inform the board of directors. Or they were that your lagers retailing you this car was going to cause you to to damages . They were not given what about financial reserves . Were you entering in the books of financial reserves necessary to cover this liability which is your obligation as general counsel . We were not entering any reserves to color cover punitive damages, no we were not. How you andt get lucy Clark Authority still have your jobs. Can you explain that to me . I think you have done a lot of good work century to go over. I think you handled this with courage and conviction. I cannot for the life of me this is either gross negligence or gross incompetence on the part of a lawyer, the notion that he can say i didnt know. Craig senator mccaskill, i respectfully disagree. As you know, i have made a promise to fix what happened in the company to make sure that we are dedicated to safety, dedicated to excellence. We are well on our way and we have made significant change to do that to do that, i need the right team. Might milliken is a man of incredibly High Integrity who has tremendous Global Experience as it relates to the legal profession. He is the person i need on this team. He had a system in place him unfortunately in this instance it wasnt brought to his attention from a frankly by people who brought many other issues forward. He is a man of High Integrity. Was there a system in place that says your lawyer is telling you your subject to punitive . Amages how is that not incompetent . She says we have our lawyer telling us for different times within a couple of years on something you had not even talked about recalling, punitive damages. How do you have a system in place it doesnt look out for that . We had very senior lawyers who had this information did not bring it forward who are no longer with the company. Detailsnt through the of the lucas report very carefully, and i would say when in doubt we reached further to take action, there are many lawyers that are no longer with the company to i think there has been a blind spot here. My time is up. Think the failure of this Legal Department is stunning and the notion you look around government, when Something Like shinsekiens, secretary did know about those problems and canceling. Nobody told him. He is gone. Madam chair, thank you. Being here today and taking the tough questions. Of complete the circle here. I would like to ask you just a couple of questions regarding your products. Time, soave a lot of the short of the answers, the better. The complaint as they started piling up in 2000 on your product, did delphi conduct any internal investigation to determine whether your part was at fault . Aware of thet deathson in terms of ,ntil february of this year 2014. Quick so you are saying obviously not. He didnt know until february of this year. Was there any reason to believe that anyone in your company may . Ave known in the exhaustive review we have done in our documents in talking with individuals, it was clear to the delphi team in working with the General Motors team when this particular situation, we were concerned about Customer Satisfaction and what it cost and quality issues. Is there possibility that any individual in your Company Simply did not take it to the top . Very hard,d very, and there is no evidence of that because its quite clear the mindset was based on information that they were given. They were working on quality issues, not safety issues. Did anyone ever raise concerns about keeping it the same with this part . Quick standard protocol in our industry is that the car manufacturer may determine the part number and they control that part number. So if that part number is ever to change, the car manufacturer would dictate the change and we would automatically up rate it. Next do you feel that delphi shoulders any responsibility here . Me explain some Important Information and i think it would lead to that discussion. A productroblem that we work with General Motors to develop and that was the switch. Thats which started with a certain set of requirements. Often in Development Working with the customer, General Motors in this case, those requirements can become more stringent. They can become less or they can stay the same. In this particular case i it was athe report very europeanstyle switch. Bywas ultimately approved General Motors and that part met the requirements that was dictated. Otherart then met with parts and became part of a subsystem called the ignition assembly. I hate to interrupt you but i dont have a lot of time. Product met the requirements of the customer. So no responsibility. No. Mr. Belugas, understanding was a sharing agreement with delphi. Was it as forthcoming as you would have liked it to have been . Do you think the limited information you receive from delphi prevented you from providing a complete report . No, i believe at this point having had the chance to put the extra sixmonth six weeks or month by way of what we had in materials, i think the report is complete. Comfortable with the delphi aspect of it that we have that information. Is there anything we dont know that is relevant . I committed and promised to an earlier committee that if we found something i would go to the board of directors. If interface anything factually so we learned that would alter it in a significant way, we would supplement the report and i would make that commitment to this committee. Right now believe that everything we could know about this issue we would put in that report or a supplemental letter. Next do you feel that delphi shoulders any responsibility . Deaths . 13 i can tell you this. Approved thes switch knowing that it was below pork values and that was an approval that was given to delphi, and delphi manufactured the switch in accordance with that approval. That delphilieve shoulders any responsibility for the 13 deaths . Iswe are the company that responsible to integrate the parts into the vehicle so it is our responsibility. Thank you very much. Thank you very much, all of you. I spoke earlier about growing up in minnesota [indiscernible] this story is not just tragic because we have constituents and because the facts are tragic. It also turns out to be an important art of mr. Valu kasreport. The wisconsin state trooper conducted an investigation himself after the crash and clearly made the link between the defect is defective ignition switch and the failure of the airbag to deploy. He cracked the code that seem to have evaded gm engineers and lawyers for years. He wrote in his report that was in the legal files as of february 2007. He wrote the two front seat airbags did not deploy. It appears the ignition switch been turned to accessory prior to the collision with the tree. Did you interview people about this report and did you figure out why no engineers had read it at gm . What happened with this report was that the report, and i believe correctly analyze the situation back as far as 2007, was collected by gm as part of into what iss put called a rumor file and at some point it was accessed by a paralegal who then sent to at no point did we have it frantically reviewed by outside experts. At no point was it access of 2014then and march when the investigation was undertaken. So during that time it was in those files, that rumor file, and know when i gm look at it other than back in 2007 when a senate. It seems to me it is somewhat official and there is also an Indiana University study, they were commissioned to look at the crash as well. Was that also in the rumor file . Next they actually did not even have that. Even though is publicly available, it gm did not gather that public information. That was not something they had until 2012 when it outside expert made available as part of their report. Be that you guys , youreor seven years starting to see all these airbag nondeployment cases that nobody saw this report and looked at it . You are seeing an example of what the report identified. File ismation flow, the not one that was searchable by the normal terms that people would use when they were looking for documents. Its my understanding from the report, and were doing what we can to make sure we do have this honor Going Forward basis. This is a tragedy that cannot happen again and im dedicated to making sure we make the changes we need to ensure that. Panel, i dofirst appreciate you have come forward out front and set up this Compensation Fund. Knowsaid were not going to if justice is done until we see with the outcomes are and i appreciate the work that has been done on the recall as the owner of her he gm car. One of the things mr. Lucas wrote in this report, he said although everyone had responsibility to fix the problem, nobody took responsibility. He said a Top Executive described it as the gm not, when everyone nods in agreement to a proposed plan of action. Steps have you taken to implement, to get rid of what we call the gm nod, and how do you ensure we move from confusedure of responsibility to defined responsibility . In my career at General Motors, and never accepted the gm not and frankly i have called people out on it. It is not appropriate. We make very complex products and its important that all voices are heard. The way you change culture is by demonstrating the behavior, making sure people understand what your expectations are, and calling them out when they dont. Ive been demonstrating that, i direct Leadership Team is 100 committed to that. I have talked openly about it. Employeesk to all globally on june 5, after i read the report, which i found deeply troubling, i told them that and i told them that behavior was unacceptable, we were not going to tolerate it. The true change will be by behaviors. I am intent on making sure the right behaviors continue Going Forward. Q. We have a custom in this committee that when that chairman of the Ranking Member shows up they can cut in line. Im going to abide by that appropriate custom and recognize the senator for his questioning. Cuts that makes you really popular here, madam chairman. I appreciate it and i thank you for holding this hearing and staying on these issues. Its important that we examine the developments following this recall issue. I know you have been working very hard on this and we all share the desire to get the answers and ensure this does not happen again. Minted it failed to report the safetyrelated defect in a timely manner and the report is called gms delay in addressing the ignition switch defect. As we all know these delays cost lives and i know i express my deepest sympathies to those who were injured or lost loved ones in Car Accidents involving gm vehicles that have now been recalled. , i welcomen i have the very public steps you have taken thus far to address the needed changes within gm, some of which you have discussed in your written testimony. Im also reminded of statements that your immediate predecessor also discussed in his efforts to create a culture of accountability at gm following the companys bankruptcy in federal bailout. Somealukas uncovered troubling findings and my in your view isnt a sign that a cultural change has yet to take hold at gm . Culture change happens over a long time. I would say mr. Ackerson did extensive work to make sure he drove the right behavior but i think we are on a continuum of making that cultural change. The very open and transparent way we are dealing with the issue and sharing it with employees, they want to change. They want to make sure we have the right systems and processes in place. I would say mr. Ackerson started on that journey and we are continuing and accelerating it. How do you plan to measure that change . On a couple of fronts, one on the very real part from a safety perspective, weve already broken down the silos and we are mining data is in using some of the latest analytic egg links to make sure information comes from across the company. We have engaged employees and they are participating in our speak up for Safety Program. Of choicerkplace survey every 18 months and we have seen improvements in that. That will be another key objective way to make sure we are driving the right openness. I get hundreds of emails from our employees on a weekly and monthly basis and they are engaged, and that to me is the best sign. Is actions, not words, that will change behaviors. What role do you think the board of directors has in changing the culture . Question role of the board is to clearly state their expectations of how they company should operate. As ceo its my job to make sure we are living up to their expectations. Valukas is based on the report. The problems were not limited to the switch as specified. From 2001 mention quite a bit of frustration on the part of gm in dealing with these delphi switches due to electrical failures and delphis inability to deliver parts for testing purposes. Taken together, this evidence would seem to indicate a problem for greater than we were initially led to believe. Now with that ignition switch, these issues have come to light, have you gone back and reviewed these concerns and determined what delphi will do in the future . We did go back and look extensively at all the documentation, and we found nothing that was abnormal in terms of product development. And ultimately how the problems were addressed that you sometimes run into as you move from development to production, etc. As i said, our product has met the requirements