Absolutely. Damian paletta and james tankersley, thank you both for being with us today. Thank you. [captioning performed by national captioning institute] [captions Copyright National cable satellite corp. 2014] like hsbcake a case that got a 1. 9 billion settlement levied at them a year ago. Of the deferred prosecution theyment is they admitted have laundered as much as 850 million for a pair of central and south American Drug cartels. We are talking that not only did they commit minor financial infractions, technical infractions, we are talking about an organization that was operating at the top of the eagle narcotics pyramid. Criminal andor surprise. They admitted it. If they did not find the evidence to put those people in jail, that is on them. That is a failure of the regulatory system. Are guilty. D they they are in league with truly dangerous and violent people and helping them out with the worst kind of behavior that a thing can be involved with. Nobody does a single day in jail. That is outrageous. It is even more outrageous when you look at it and comparison with who does go to jail in america. People at the very autumn of the pyramid. People who are caught selling dime backs in the corner. Theyre the people that go to jail for real time. They go to jail for 5, 10 years. At the same time we are letting hsbc off with a total walk, nobody pays any individual penalty that case. His book the divide explores injustice in america. Gm Ceo Mary Barra publicly apologized on tuesday for her Auto Companies faulty in mission switch in certain vehicles that resulted in at least one dozen deaths. The gm recall that started in february covers more than 2 million vehicles. With davidtestified freeman, the acting administrator of the national Highway Safety administration. Run the house energy and commerce subcommittee, this hearing is 2. 5 hours. I now convene this hearing. Why does it take so long . Ms. Barra, if you would like to take your seat, please. Thank you. This question is the focus of our investigation. I now convene this hearing of these customers told General Motors that just by bumping the key with their knee while driving the cobalt it would shut off. In 2004 and 2005, gm engineers twice considered the problem and even developed potential solutions to fix it. But fm decide it the quote tooling costs and piece prices are too high and the quote none of the solutions represent an acceptable Business Case. Gm de tooling cost and piece prices are too high, unquote, and the quote none of the solutions represent an acceptable Business Case, end quote. The solution gm settled for was to ask customers to remove heavy on thes from the key chains and yet just a year later gm decided to fix the ignition switch. In 2005, gm told supplier dell if i to increase the torque in the ignition switch so the key wouldnt move out of the run position and into accessory mode. Gm was not alone in examining problems with the cobalt. The lead government safety regulator, the national Highway Traffic Safety Administration known as nhtsa reevaluating concerns. But they looked at nonair bag deployment. In 2010, the chief of nh the asa proposed that the Agency Invest gauze he spotted a quote, nondeployment. And internal presentation noted a spike in warranty claims for cobalt air bags. A total of 29 crashes causing 25 injuries, 4 deaths and 14 field reports. Yet nhtsa decided not to investigate even when the issue was raised three years later in 2010. Nhtsa again passed on investigating. Gm was also looking into the air bag nondeployments. As early as 2007, gm started to track incident where cobalt air bags did not deploy in crashes. In 2011 and 2012, gm assigned at least two groups of engineers to examine the problem. According to gms public statements it wasnt until december 2013 the Company Finally put the pieces together and linked the problems with the air bags with the fally ignition switch. Almost ten years after customers first told gm the cobalt ignition switch didnt work. We know this. The red flags were there for gm and nhtsa to take action but for some reason it did not happen. Why didnt they put the pieces together for ten years . Why didnt anyone ask the critical, important questions . Why did gm accept parts below their own Company Standards and specs . When gm got a new ignition switch for the cobalt in 2006, did they recognize that the faulty switch poses a sif they problem . Why did gm keep the old part number which led to confusion. When gm replaced the switch, did engineers consider how the faulty ignition impacted other systems in the car like air bags . Why did gm replace the ignition switch in new cars but not the older models . Why did gm think a memo about the size of key chains wu enough to solve the problem . Why did nhtsa twice decide not to investigate and why not make the keys of the accessory position and air bags not deploying . Did anyone ask why . For both are people talking to one another . Did gm and nhtsa have a culture where people dont pass information up and down the chain of command . To borrow a phrase, what we have here is a failure to communicate and the results were deadly. A failure to communicate both between and within gm and nhtsa. Today well ask them what theyre doing to not just fix the car but to fix a culture within a business and a government regulator that led to these problems. This is about restoring public trust and giving the families and Crash Victims the truth about whether the tragedy could have been prevented and if future ones will be prevented. It is my hope and expectation today well not hear a blame game or finger pointing. The engineers and workers wont matter if the people dont care and people dont care that you know until they know that you care. This investigation is only three weeks old and determined to find the facts and identify the problems so that tragedy like this never happens again. This investigations bipartisan, as a priority of the members of the committee. I want to thank mary barra for being here and the head of nhtsa, David Friedman and Ranking Members for working with us. I now give the remaining of my time to dr. Michael burial jess. I thank the chairman for yielding. I thank the witnesses for being here and being so responsive to the committees staff request. We are here to examine a very important matter. The hearing is appropriately named we do have questions for General Motors. We have questions for the national Highway Traffic Safety Administration. Two chances to open up formal investigations into the recall General Motors cars both in 2007 and 2010, nhtsa examined problems with the vehicles and both times, both times decided that no investigation was needed. We need to hear from nhtsa today how you intend to improve the process Going Forward and we were just here five years ago with the toyota investigation. We heard a lot of things out of nhtsa on those hearings. I would like to know how they improved the process and how we can expect to have confidence in their ability Going Forward. I yield back. Now recognize the Ranking Member of the committee, ms. Degette of colorado. Thank you very much, mr. Chairman. Like all of us im deeply troubled about what our investigation has revealed about gms Business Practices and its commitment to safety. Heres what we know. We know that gm has raumed over 2. 5 million vehicles because of defective ignition switches. We know they should have tunnel it much, much earlier. We know that gm failed to provide federal regulators with key information. And sadly, we know that at least 13 people are dead and there have been dozens of crashes because of gm produced cars that had a deadly effect. Mr. Chairman, i have a copy of the ignition switch assembly for one of these vehicles. And this is it. A spring inside the switch, a piece that costs pennies, failed to provide enough force causing the switch to turn off when the car went over a bump. Gm knew about this problem in 2001. They were warned again and again over the next decade but they did nothing. And i just want to show how easy it is to turn this key in this switch. If you had a heavy key chain like my mom key chair or if you had if you were short and bumped up against the ignition with your knee, it could cause this key to switch right off. Mr. Chairman, we now know that these switches were defective from the start. In february of 2002, gms ignition switch supplier dell if i informed the company that the switch did not meet gms minimum specifications. But gm approved it anyway. Now, yesterday we sent ms. Barra a letter about this decision. I would like to make it a part of the hearing record. Without objection. Soon after the approval, the cars were on the road and it didnt take long for problems to appear. In 2003, june 2003, the owner of a saturn ion with 3,474 miles on the odometer made a warranty report that he or she, quote, bumped the key and the car shut off. Gm would receive more than 130 similar warranty claims of owners about this problem over the next decade and never informed the public or reported the problem to federal safety regulators. The minority staff conducted this warranty analysis and again we prepared a memo about the claims. I would ask unanimous consent to put that in the record, mr. Chairman. Without objection. Initially, gm opened multiple investigations into the ignition switch issue. Each which concluded the switch was bad. It department meet the minimums. In 2005, gm identified solutions to the problem but concluded that, quote, the tooling cost and piece price are too high. Thus, none of the solutions represents an acceptable Business Case. Documents provided by gm show that this unacceptable cost increase was only 57 cents. Mr. Chairman, we have this document that we got from gm. Somehow its not in the binder. Id ask youian mouse consent. Without objection, so ordered. Another investigation in 2005 led gm to issue a Technical Service bulletin advising dealers to distribute key inserts to help reduce the problem. This was a simple fix to reduce the force on the switch. Mr. Chairman, these are the keys of one of my Staff Members who actually owns one of these cars. And as you can see, theres a long, long insert. What the key inserts were supposed to do is go in the middle and create a little hole so the key and the keys wouldnt go back and forth. Unfortunately, gm never made this bulletin public. More than 500 people out of the thousands of drivers who had cars with faulty switches got the key insert. And gm knew it. Soon after this decision, Company Officials quietly redesigned the switch but they never changed the part number. And an astonishingly this committee learned that when gm approved a new switch in 2006, they did it with still knowing that the new switch didnt meet specifications. The company even put more cars with bad switches on the road from 2008 until 2011. And we still dont know all the information about this. Between 2003 and 2014, gm learned hundreds of reports of ignition switch problems through customer complaints, warranty claims, lawsuits, press coverage, field reports and even more internal investigations. But time and time again, gm did nothing. The company continued to sell cars knowing they were unsafe. I know we have a lot of family members here, mr. Chairman, and i want to express my deepest sympathies to them and tell them something more. Well get to the bottom of this. Well figure out what happened and well make sure it doesnt happen again. Mr. Chairman, i want to thank miss barra for coming. She is brand new at the company. I believe shes committed to fixing the situation. We have a lot of questions to ask today, though. And i know every member of the committee is concerned about this. Thank you very much. Gentle ladys time expired. Recognize mr. Upton for five minutes. Thank you, mr. Chairman. We know that with a 2ton piece of high velocity machinery there is, in fact, a zero margin for error. Product safety is indeed a life or death issue. But sadly, Vehicle Safety has fallen short and its not the first time. During the late summer of 2000 in this very room i led the oversight hearings that examined the Ford Firestone recalls, a tire malfunction causing violent crashes and americans did not feel safe behind the wheel. We gathered testimony from the company and Agency Officials and reviewed thousands and thousands of pages of documents. And we found that the system indeed had failed. Information about the defective tires had been shared with the companies and with nhtsa. The parties failed to protect the Public Safety and over 100 people died. After that investigation, i introduced the tread act to correct many of the problems that contributed to the Ford Firestone tragedy. That bill was meant to ensure data about safety is reported so that defects can be quickly identified and fixed and lives ultimately saved. The tread act is now law since november 2000. Yet here we are investigating another safety failure. Deja vu all over again. One month ago gm issued a recall for an ignition switch defect in six vehicles of 1. 6 million cars. And last friday they recalled another 900,000 vehicles. Gm acknowledges that a dozen people have died in automobile crashes associated with that defect. Two were teenagers from my own community. Gms ceo and acting administrator friedman. First step in the quest to find out what went wrong. The committees purpose the same as it was in 2000. Making sure that drivers and families are protected and cars are safe. Ill repeat what i said on firestone tires in 2000. Todays hearing is very personal to me because i come from michigan. The auto state. The auto capital of the world. That is no less true today. Michigan is proud of its Auto Industry and while michigan citizens build cars obviously we drive them, too. Document pros deuced to the Committee Show that both nhtsa and gm received complaints about and data about problems with ignition switches and air bags. These complaints go back at least a decade. Nhtsa engineers did crash investigations as early as 05 and twice examined whether complaints with air bags constituted a trend. Gm submitted Early Warning reports to nhtsa including data of crashes in the recalled cars. With all that information available, why did it take so long to issue the recall . In this case, just as it was with Ford Firestone, it was news reports that brought the attention to the nations attention. Brought the problem to the nations attention. This investigation of the recall is indeed bipartisan. As it should be. Well follow the facts wherever they lead us and were going to work until we have the answers and can assure the public that, indeed, theyre safe. Id like to note that the chairman of our cmt subcommittee mr. Terry will be joining us for questions this afternoon. With his subcommittees record on motor Vehicle Safety issues he will be watching closely as this investigation unfolds so that he can take our findings and determine whether and what changes may be needed to the laws designed to keep drivers safe on the road. After all, our goal on every issue follows the dingell model. Identify the problem or abuse fully. And where needed, fix it with legislation so that it wont happen again. I yield to the vice chair of the Committee Miss blackburn. Thank you, mr. Chairman. And miss barra, thank you very much for being here today. We really owe this hearing to the American People, to gm customers, and to the relatives of the 12 individuals that are lost their lives. And it is important that we get to the bottom of this. And to see what the roles of gm and nhtsa were in this figure out whos at fault and we want the know who knew what when and miss barra, that includes you. Were going to want to know what your exposure was to this issue as you took the helm at gm as the ceo. You know, in my district, we have the gm plant. The saturn ion has been recalled. That was made at that plant there in spring hill. So this is something that is important to my constituents. Those that have worked with gm, i thank you for being here and we look forward to the answers. I yield back. Now recognize Ranking Member of the full committee, mr. Waxman for five minutes. Thank you, mr. Chairman. I have a sad sense of deja vu sitting here today. I was part of the committee holding the Ford Firestone hearing in 2000. I led the committees hearing on toyotas problems with unintended acceleration in 2010. Each time, we heard about how auto manufacturers knew about potential defects and about how federal safety officials at the national Highway Traffic Safety Administration missed signals that should have alerted them to defective cars on the road. And here we are today under similar circumstances. Over the last month, the full dimensions of another auto safety disaster have unfolded. General motors has recalled 2. 5 million vehicles due to a defective ignition switch and the company has acknowledged that these cars have caused dozens of crashes and 13 fatalities. Mr. Chairman, i know the families of some of these victims are in the audience for todays hearing. I want to acknowledge them. Thank them for coming. We owe it to them to find out what happened. The facts that we already know are hard to believe. Gm has known for years about this safety defect and has failed to take appropriate action to fix the problem. The Company Installed an ignition switch it knew did not meet its own specific