Transcripts For CNBC Closing Bell 20140401 : vimarsana.com

CNBC Closing Bell April 1, 2014

Responsibility and liability in this entire issue. Have you met with them and with the Engineering Team that was responsible for this switch . I have not met with the specific Engineering Team that is responsible, but i am speaking to leadership and those individuals are being interviewed as part of the investigation. Now, going back, did you say that this was a defective part when you talked about it earlier . We have learned when we knew when the recall decision was made and we later went back and looked at the chronology, theres points that suggest, and thats why were doing the investigation. Okay. All right. Now, i think that youre going to hear from more than one of us about not having a new part number assigned. Who made that decision . Was that strictly a delphi decision or did that come into the gm supply chain for that decision to be made as to how that part number would be coded . At a general level, General Motors is responsible for General Motors parts numbers but, again, thats part of the investigation to understand how that happened. Okay. Does that seem inconceivable to you . Yes. It is inconceivable. It is not our process, and it is not acceptable. Okay. I would think that it probably is not. Have you asked delphi if you can have access to their documentation and their email chain dealing with this issue . I have not, and we will go as the investigation takes to get the information we need to make a complete and accurate accounting of what happened. Okay. My time has expired. Thank you, mr. Chairman. I yield back. Just for clarification, we have asked for that email chain from delphi and well let you know when we get that. Now recognize chairman emeritus of the committee, mr. Dingell, for five minutes. Mr. Chairman, i thank you for your courtesy. I begin by telling the families of those who were injured or killed by the defective General Motors vehicles they have our sympathy and we believe the events here are tragic, indeed. And i join everyone in expressing my condolences to the families who were killed or injured in those crashes. Now it is incumbent upon the congress, federal regulators, and General Motors to determine how these deaths could have happened and to take reasonable steps to ensure that the safety of american motorists and their families are moving forward. I expect that this investigation will be thorough, and i counsel all the stakeholders to be unabashedly forth th nforthrigh. Miss barra, id like to build on chairman murphys line of questioning, and all of my questions will require yes or no answers. If you cannot an some answer some of my questions, i expect you will submit responses for the record and all available relevant supporting materials. Now, miss barra, is it correct that gm has now recalled approximately 2. 5 million small cars in the United States due to defective ignition switches . Yes. Yes or no. Now, miss barra, is it correct that gm recently expanded its recall of small cars because it was possible that defective ignition switches may have been installed as replacement parts, yes or no. Yes. Miss barra, is it correct that the ignition switch in question was originally developed in the late 1990s and approved by General Motors in february of 2002 . Yes or no. Yes. Miss barra, is it correct that General Motorss own design specifications for such ignition switch required 20plus or minus 5 newton centimeters of torque to move the switch from the accessory position to the run position . Yes or no. Yes. Miss barra, is it correct that General Motors approved production of such ignition switch despite test result by delphi during the production part approval process or ppap showing that the switch did not meet gms torque requirement . Yes or no. Its not clear to me. Now, miss barra, is it correct that General Motors approved a redesign of the ignition switch used in the presently recalled vehicles in april 2006 . Yes. Miss barra, and it connect that gms torque rechoirmequirer the redesigned remained the same . Its not clear to me. When that information becomes available, would you submit to the committee . Yes, i will. Miss barra, to your knowledge, did the redesigned ignition switch meet gms standards . I did the redesigned ignition switch meet gms torque requirement . Its part of the investigation. Miss barra, will you please submit for the record an explanation of the factors that gm takes into consideration when approving a part for production, are there circumstances where gm may approve parts for production when such parts do not make such design specifications . Yes or no. Yes. If so, could you please submit materials for the record explaining when and why that might occur . Yes. Miss barra, i appreciate the lengths to which gm under your leadership is going to recall the vehicles and ensure that theyre safe to drive. Gms cooperation with the committee is necessary in order to understand the process by which and the reasons decisions were made leading up to the 2014 recall. You may have so far done so, and i expect that you will continue to do so. Thank you for your courtesy, mr. Chairman. Thank you, miss barra. I yield back the balance of my time. The gentleman yields back. Recognize the chairman emeritus of the majority, mr. Barton of texas, for five minutes. Thank you, mr. Chairman. Before i ask my questions i want to make a general observation. This is probably the last Major Investigation that this subcommittee and full committee is going to conduct where we have the services of mr. Dingell and mr. Waxman. Weve had a history on this committee and this subcommittee going back at least 40 to 50 years that the when we have major issues, we try to approach them on behalf of the American People in a nonpartisan, very open way, and it certainly appears were going to continue that tradition today, so i hope that we can show the best to the American People that the congress at its best, gets the facts, presents the facts, and does so in a way that in the future we protect the Public Health and safety for the American People. Now, with that caveat, i do have a few questions. A number of congressmen so far have made the point that these ignition switches didnt appear to meet specifications, and my assumption is that you have agreed that they did not meet specifications. Is that correct . Weve learned that as we did the recall. Now, im an industrial engineer, and i used to be a registered professional engineer. Im not currently registered, but i have been in the past. Why in the world would a company with the stellar reputation of General Motors purchase a part that did not meet its own specifications . I want to know that as much as you do. It is not the way we do business today. Its not the way we want to design and engineer vehicles for our customers. I mean, i just dont understand that. Ive never worked in an Auto Assembly environment. I have worked in a defense plant, an aircraft plant. I was plant manager of a printing plant. I have done limited, very limited consulting in the oil and gas industry, but i have never been a part of an organization that said we set the specs. When a part doesnt meet the specs, we go ahead and buy it anyway. Youre currently the ceo, but at one time i think before you became ceo, you were the Vice President for Global Product Development purchasing and supply chain. Is it your position now that General Motors will not accept parts that dont meet specifications . We will not accept parts that dont meet our performance safety functionality durability requirements. As i mentioned before, in the steel example, there will be times where there will be a material or a part that doesnt meet these exact specification, but after analysis and looking at the performance, the safety, the durability, the reliability, the functionality, it will be okay. That happens very often as we buy steel to make the bodies of the vehicles. Then you dont need specification with all respect no but what you just answered is gobbledygo gobbledygook. Its your own specification. If a part doesnt meet the specification why in the world would not refuse it and only accept a part that meets a specification . There needs to be a well documented process if you accept a part that doesnt meet the original specification. Will the gentleman yield . Briefly, yes. Do you have that information . On steel . No, on starters. On the ignition switch . Yeah, if it didnt meet specification, do you have the information on the starters that it met all those other criteria . That is part of the investigation but clearly by the fact that we made a recall, it did not meet the performance we have the advantage as a subcommittee that we know now what happened in the past. We know now that there is a real problem. We know now that a number of young people have lost their lives apparently because of this defect. So we have the advantage of hindsight, and so i understand that, but as was just said, theres no reason to have specifications if you dont enforce them. This next question is not a trick question, but its an important question. Right now, how many parts are being used in General Motors products that dont meet your own companys specifications . I dont have that exact number but i can tell you the parts that were using today meat the performance and the reliability, the safety that they need to. If we find we have a part that is defective, that doesnt meet the requirements, we then do a recall. Again, with due thats not an acceptable answer i think to the American People. Were not telling you the specifications to set. Now, there are some safety specifications that by law and nhtsa by regulation sets, but there shouldnt be a part used in any gm product or for that matter any other automobile product thats sold in the United States that doesnt meet the specifications. My last question well, at what level was the decision made to override and to use this part even though it didnt meet specification . 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 that answer that question. All right. Thank you. Thank you, mr. Chairman. Thank you. Now recognize mr. Braley for five minutes. Thank you, mr. Chairman. Miss barra, weve had different perspectives during this hearing. You have been appropriately focusing your attention on the members of this committee and answering our questions and i have been staring at these photographs on the back wall, and i see young women the same age as my daughter. I see young men the same age as my two sons. My son paul owns one of your cobalts. I see a young marine in his dress blues, and im reminded of the photograph i have in my office upstairs of my father at the age of 18 in his dress blues at camp pendleton, and the focus of this hearing so far has been on gms commitment to safety, which i think we all agree on is an important topic for this hearing. You testified in your opening, and i think im quoting, our customers and their safety are at the center of everything we do, and you responded to a question from miss blackburn and told us that you were going to run gm differently than its been run in the past, and i have a copy of gms march 18th press release announcing jeff boyer as your new Vice President of Global Vehicle safety, and in this press release he is quoted as saying, nothing is more important than the safety of our customers in the vehicles they drive. Todays gm is committed to this, and im ready to take on this assignment. 20 years ago before this hearing, an iowa family harmed by another defective gm vehicle gave me this promotional screwdriver set that they got from their local gm dealer. And if you look at it, on the outside it has a slogan. Safety comes first at gm. So my question for you, and i think the question that these families back here want to know is, whats changed at gm . Isnt it true that throughout its corporate history, gm has represented to the driving public that safety has always been their number one priority. I cant speak to the statements that were made in the past. All i can tell you is the way were working now, the training that weve done, weve changed our core values, the Decision Making were leading, were leading by example, were you know, one of the process changes weve also made is in addition to when the Technical Community makes their decision about a safety recall or a recall, we are going to be reviewing it. Mark royce, the head of global product doft, aevelopment, and to see if theres more we want to do. Hasnt the core values of General Motors always been that safety comes first . I have never seen that part before. Isnt it true that throughout the history of the company its made representations like this to the driving public as a way of inducing them to buy your vehicles . Todays General Motors all i can tell you is todays General Motors we are focused on safety. We have over 18 vehicles that have a fivestar crash rating. Our entire buick lineup meets that requirement. We take but were talking about these vehicles and whats changed. Have you had a chance to read this article in the saturday new york times, a florida engineers eureka moment with a deadly gm flaw . I believe i read a portion of that article. Its by bill vlosic, and he wrote in here about an engineer named mark hood who was at a loss to explain why the engine in brook meltons cobalt had suddenly shut off causing her fatal accident in 2010 in georgia. Then he bought a replacement for 30 from a local gm dealership and the mystery quickly unraveled. For the first time someone outside gm even by the companys own account had figured out a problem that it had known about for a decade and has now linked to 12 deaths. Even though the new switch had the same identification number, mr. Hood found big differences, and then the article continues, so began the discovery that would set in motion gms worldwide recall and one of the gravest safety crises in the companys history. Do you agree with the author that this is a grave safety crisis in the history of General Motors . I have said that this incident took way too long. It is not acceptable, and thats why were making radical change to the entire process, adding more resources, naming a Vice President of Global Vehicle safety who is tremendously experienced and of the highest integrity and we will continue to make process changes and people changes as we get the results of the investigation, and we will take all of those recommendations and we will make changes. Before i yield back, mr. Chairman, i would like to ask unanimous consent to have this article added to the record for the hearing, if its not already part of the record. Without objection. If the gentleman would yield his remaining second, miss barra said they had changed their core values. I think it would be great if she could submit to us what those new core values for gm are so we would have those for the record. Ill ask that for the record. And i would also like to have any prior statement of core values from General Motors over the last 20 years so we can see what has changed, mr. Chairman. Well be asking members for several questions do s to submit to gm. Dr. Burgess. Thank the chairman and the witness for spending so much time with us this afternoon. You mentioned, miss barra, that over a decade ago General Motors embarked upon a small car program. Do you recall why that was . Sniim sorry . Why did gm embark on a small car program . To have a complete portfolio, i believe. But the mission or the type of car that was manufactured by gm previously had not filt fit that model, so this was an entirely new business line that gm was undertaking . The cobalt there are several products but if youre speaking specifically about the cobalt, it was following a previous small car but it was an allnew program architecture, et cetera. Was any part of this done because of the cafe standards that were changing . Was any of this done because of congressional action that had occurred previously . I cannot answer that question. I wasnt in a Decision Making at that point. Let me ask you this, when mr. Waxman was giving his opening statement, he said it was a shame that the national Highway Traffic Safety Administration did not have access to the same information that General Motors had. Do you think that was a fair statement for him to make . As part of the investigation were doing, im looking at what information was provided and when. And thats, you know, becomes then the troubling part of all this. I think the Ranking Member had you look at tab eight in the information binder, and this was talking about the ignition key Cylinder Assembly and the date of the pdf that i have is january 1st of 2005. Again, youll find that under tab eight, but later on in the same document it says we are closing this with no action. The main reasons are all possible solutions were presented. The lead time for solutions is too long. The tooling costs and price piece price are too high and none of the solutions seem to fully countermeasure the possibility of the key being turned off. So that was all in january of 2005, and then, you know, as part of our document evaluation for getting ready for this hearing, there were several accident reports that were supplied to us, and one of those occurred not too far away in maryland in the middle of the summer of 2005. In that accident sequence a cobalt hit a series of trees at the end of a culdesac. The driver was fatal

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