We are going back live to capitol hill. That hearing on gms alt ignition problems. Is scheduled to testify in just a few moments on your screen there. Back to the hearing. Who actually owns one of these cars. As you can see, there is a long insert. What the key inserts were supposed to do is go in the middle and just create a little hole so the keys wouldnt go back and forth. Unfortunately, gm never made this bulletin public. Out of the00 people thousands of drivers got the key insert. And gm knew it. As soon after this decision, Company Officials quietly redesigned the switch but they never changed the part number. Hingly, when they approved a new switch in 2006, they did it still knowing that the news which did not meet specifications. The company even put more cars with bats which is on the road. Between 2000 32014, gm learned of hundreds of reports of ignition switch problems through customer complaints, lawsuits, warranty claims, press coverage, field reports and even more internal investigations. , gm did time again nothing. The company continued to sell cars knowing they were unsafe. It i know we have a lot of family members here and i want to express my deepest sympathies to them. I want to tell them something more. We will get to the bottom of this. We will figure out what happened and we will make sure it does not happen again. Ms. Barra fork coming. I know every member of this committee is concerned about this. Thank you very much. We will now recognize mr. Upton for five minutes. That with a two ton piece of high velocity machinery, there is a zero margin of error. But safety is a life or death issue. Vehicle safety has fallen short and its not the first time. Of 2000,e late summer i led the oversight hearings four firestonehe recalls. Americans do not save feel safe behind the wheel. We got testimony from the company and Agency Officials and reviewed thousands of pages of documents. We found that the system indeed had failed. Information about the defective tires had been shared with the companies. Over 100 people died. After that investigation, introduced the act to solve the many problems that have contributed to the firestone tragedy. So that effects can be quickly identified and fixed and lives ultimately saved. The act has now been lost since 2000. Last friday, the recall was for another 9000 vehicles. Gm acknowledges that one dozen people have died in automobile crashes related to that effect. The gm ignition switch recall hearing we are awaiting opening remarks from mary barry. Stay with us. You are watching bottom line on Bloomberg Television. We will be right back. Welcome back to bottom line carried a live coverage of the gm ignition hearing on capitol hill. You are looking at the california democrat as we were in break. Michigan republican fred upton asking perhaps the question of the day. Why did it take gm so long to issue the recall . We are waiting to hear testimony , the new gm ceo. That should be coming up shortly. Over the last month, the f of anotherons disaster have unfolded. General motors has recalled 2. 5 million vehicles due to a defective ignition switch. The company hasnt knowledged that these cars have caused dozens of crashes and 13 fatalities. I know the families of some of are it did not meet its own specifications. Numerous internal investigations resulted in nothing but a nonpublic Service Bulletin that partially fixed the problem for fewer than 500 drivers. New analysis released this morning revealed that over the last decade, gm received over 130 warranty claims from drivers and gm technicians who experienced and identified the defect. Drivers reported that their cars shut off after hitting bumps or potholes at high rates beads or they did something as simple as pressing the ignition switch with their need. One gm technician even identifies the exact part causing the problem. A spring that would have caused as much as a few cost as much as a few postage stamps. Gm did not implement the simple fix when they learned about the problem. At least a dozen people have died in defective gm vehicles. More information the Committee Received last week suggests that gm still has failed to fully own up to potential problems. Gm finally modified the ignition for later models. They told the committee that the switches installed from 20082011 still did not meet gms own specifications. Offinally announced a recall these vehicles last friday. But told the public it was parts installed during repairs, not because of defective parts originally installed in the vehicles. There are legitimate questions gmneed to ask about whether did enough to uncover this problem. In retrospect, it is clear that the agency missed some red flags. It was laboring under handicap that appears to have been a lot of information that gm new that they do not share with the national highway traffic administration. We need to make sure that the public have access to the same information about safety as auto executives. The Motor Vehicle safety act of 2014. This bill is modeled on the legislation that the committee passed in 2010 but was never enacted into law. It will make more information on defects available to the public and it will increase Civil Penalties for manufacturers when Companies Like gm failed to comply with the law. We should learn as much as we can from this investigation. Then we should improve the law to make sure we are not here again after another auto safety tragedy in the near future. I want to yield back my time. Thank you. I would now like to introduce the witness for todays hearing. Is the chiefa executive officer of General Motors company and has been in this role since january 15, 2014 winter became the member of its board of directors. She has held a number of positions in this company from 20082009, she served as Vice President of the Global Manufacturing engineering and from 2000 52008 she was executive director of vehicle manufacturing engineering. She has also served as the plant manager and director and numerous other positions. I will now swear in the witness. You were a ware that the committee is holding an investigative hearing and has the practice of taking. Do you have any objections to testify under oath . No. You are entitled to be advised by counsel. Do you desire to be advised by counsel during todays hearing . No. If you would please rise and raise your right hand, i will swear you in. You swear that the testimony you give is theo truth, the whole truth and nothing but the truth . I do. You are now under and subject to the penalties of the United States code. You may now give a five minute summary of your written statement. Thank you, mr. Chairman and committee members. My name is mary barra and im the ceo of General Motors. I appreciate the opportunity to be here today. More than a decade ago, gm embarq on a small car program. Sitting in today, i cannot tell you why it took so long for a safety defect be announced for this program. I can tell you that we will find out. Situation. Extra neri it involves vehicles we no longer make. But it came to light on my watch, so i am responsible for resolving it. When we have answers, we will be fully transparent with you, with our regulators and with our customers. While i cannot turn back the clock, as soon as i learned about the problem, we acted without hesitation. We told the world we had a problem that needed to be fixed. We did so because whatever mistakes were made in the past, jerk from our response abilities now or in the future. Todays gm will do the right thing. That begins with my sincere apologies to everyone who has been affected by this recall. Especially the families and friends who lost their lives or were injured. I am deeply sorry. I have asked former u. S. Attorney anton deluca is to conduct a thorough investigation. I have received updates from him and he tells me he is well along with his work. He has free range to go where the facts taken, regardless of outcome. The facts will be the fact. My Leadership Team and i will do what is needed to help assure this does not happen again. We will hold ourselves fully accountable. However, i want to stress, i am not waiting for his results to make changes. I have named a new Vice President of Global Vehicle safety. A first for General Motors. The Top Priorities to quickly identify and resolve any and all product safety issues. Tasks not taken on this alone. I stand with them and my senior Leadership Team stands with them as well. We will welcome input from outside of gm from you, from our customers, our dealers and current and former employees. Of recallsround demonstrates just how serious we are about the way we want to do things at todays gm. We have identified these issues and we have brought them forward and we are fixing them. To keepsked our chain stressing the system at gm and work with one thing in mind. The customer and their safety are at the center of everything we do. Our customers who have been affected by this recall are getting our full and undivided attention. To themalking directly through a dedicated website with constantly updated information and through social media platforms. We have trained and assigned more people to our Customer Call Centers and wait times are down to seconds. We are sending customers written information through the mail. Dealers toowered our take extraordinary measures to treat each case specifically. If people dont want to drive a recalled vehicle before it is repaired, dealers can provide them with a loner or a rental car free of charge. Today, we provided nearly 13,000 loner vehicles. Is already looking for another car, dealers are allowed to provide additional cash allowances for the purchase. F a lease or new vehicle our supplier is manufacturing the Replacement Parts for the vehicles that are low longer in production pyramid commissioned two lines and have asked for a third production line. Those parts will start being delivered to dealers next week. These measures are only the first in making things right and rebuilding trust with our customers. Employeesminded our and getting the cars repaired is only the first step. Giving customers the best support possible throughout this process is how we will be judged. I would like this committee to know that all of our gm employees and i are determined to set a new standard. Im encouraged to say that everyone at gm, including our board of directors, supports this. I am a secondgeneration gm employee and im here as the ceo but also here to represent the men and women who are part of todays gm and are dedicated to putting the highest quality, safest vehicles on the road. A town halleld meeting to formally introduce our new vp of safety. We met at our Technical Center in michigan. One of the places where the men and women who engineer our vehicles work. They are the brains behind our cars and also the heart of General Motors. It was a tough meeting. Like me im a they are disappointed and upset. I could see it in their faces and hear it in their voices. They had many of the same questions that i suspect are on your minds. They want to make things better for our customers and in that process make gm better. They particularly want to know what we plan to do for those who have suffered the most from this tragedy. That is why i am pleased to announce that we have retained kenneth as a consultant to help us evaluate the situation and recommend the best path forward. Im sure this committee knows he is highly qualified and is very experienced in handling matters such as this. Having led the compensation , thets involved with 9 11 bp oil spill and the Boston Marathon bombing. He brings expertise and objectivity to this effort. As i have said, i consider this to be an extraordinary event and we are responding to it and asked her neri ways. As i see it, gm has civil responsibility and legal responsibility. We are thinking through exactly what this was possibilities are and how to balance them in an appropriate matter. Ringing on mr. Feinberg is the first step. I will now be happy to answer your questions. Thank you. Acknowledgent to that the families are here today. We know we are aware and our we have all of you in our hearts. Our committee reviewed more than 200,000 pages of documents. We have found that as soon as the cobalt hit the road in 2004, drivers began to immediately complain to gm about the cars ignition system. Is toe how frightening it drive a car that suddenly loses power steering and power brakes. When the cobalt was being built back in 2002, gm knew this which did not meet its specification for pork. Am i correct . Yes. They understood the torque measured below its own specifications. There is a difference between a part meeting or not meeting specifications and a part being effective. Under what scenario is that affecting parts that dont meet gm specs allowable . Specificationt a for steel but because of the different suppliers and availability of steel to make products, you will assess the performance, functionality, durability, the aspects of the to livet is necessary up to what the performance and the durability needs to be. That would be an example of when you would have a part or material that does not meet the ok from aout but is functionality perspective. Is that switch acceptable . At what time frame . At the beginning. It did not meet the specs for gm. Is that acceptable . As we know today, it is not. In 2006, gm changed its ignition switch supplier. They put a new spring in to increase the torque. There was a new part. In that binder next to you, 25. Ou would turn to tab this is an email exchange between delphi employees in 2005 discussing the changes to the ignition switch. The email notes that a gm engineer is asking for information about the ignition switch because cobalt is blowing up in their face in regards to turning the car off with the drivers knee. If this was such a big problem, replaced the switch is in the cars already on the road . What you just said does not match tab 25. The bottom of the page. Clearly, there were a lot of things that happened. There have been a lot of statements made as it relates. That is why we have hired him to do a complete investigation of this process. We are spanning over a decade you dont know why they didnt just replace the old switches . I dont know. Given the complaints, why wasnt this identified as a safety issue . I cant answer specific questions at this point in time. Gmin the chronology, states they did not make the connection between the ignition switch problems and the airbag problems until 2013. When they decided to switch the ignition and 2006, did the company ever examine how a faulty ignition switch could affect other systems like the airbags . That is part of the investigation. Should they . Should we understand should they look at how to fix other Vehicle Systems . Yes. Gm when jim concluded concluded that the tooling costs and prices are too high, what does that mean . I feigned that statement to be very disturbing. That statement to be very disturbing. If that is why the decision was made, that is unacceptable. That is not how we do business in todays gm. How does gm balance cost and safety . We dont. If there is a safety issue, we take action. Onwe know there is a defect our vehicles, we do not look at the cost associated with it. We look at the speed in which we can fix the issue. Was there a culture and gm that they would have put cost over safety . Were doing a complete investigation. I would say, in general, we have moved from a cost culture after the bankruptcy to a customer culture. We have trained thousands of people on putting the customer first. We have gone with outside training. If part of our core values it is one of the most important cultural changes were driving and General Motors today. Im out of time. Defect as about the far back as 2001. 13 years before the vehic recal. The investigation will tell us that. You dont know when gm knew about the defect . Take a look at tab seven in yor notebook. This is a gm document. What this gm document talks about is this switch. Says kerry down a valuation on this which revealed two causes of failure. Low Contact Force and low lunge or force. This islunger force. The first ive seen this document. So you dont know how long jim knew about this. Thats why im doing an investigation. Informed gm in 2002 that the switch was posted be 15 minimum torque specification. These witches were between 410. The specification is correct. It was mos supposed to be 20 or more. We know that now. Gm was notified by delphi, correct . Im not aware of being notified. I only have five minutes. Im sorry. As 2004, 10 years ago, gm conducted a problem systemion tracking inquiry after it learned of an incident where the key moved out of the Running Condition and in a 2005 cobalt. You dont know . You dont know about that . Look at tab 8, please. By the way, im getting this information from the chronology that gm provided. Back as 2004, gm conducted a problem resolution tracking system inquiry after it learned of an incident where the key moved out of the Running Condition. Is that correct . Yes. Thank you. After the prt at inquiry, one engineer advised against further action because there was no acceptable Business Case to provide a resolution and it was closed. Is that correct . If that is true, that is a very disturbing fact. In 2000 five, gm received more reports of engine stopping when the keys were jerked out of the Running Condition. Proposedovided changes to the keys. Is that correct . That is part of our investigation to get that complete timeline. Much of this im taking from the timeline gm has already done. As a result of the investigation, a technical Service Bulletin was issued to dealers that if car owners complained, they should be warned of this risk and advised to take on essential items from the keychain. This recommendation was not made to the public. No public statements were issued and no recalls set. Is that correct . Yes. Contracted with delphi to redesign the