Now the testimony of gms Ceo Mary Barra and the attorney who conducted the investigation. The hearing is just under three hours. [inaudible conversations] i now convene this hearing titled the gm ignition switch recall investigation update. Ms. Barra when you were before the committee three months ago, you could not answer many of the questions about why to took gm years to figure out why the air bags were not deploying in your vehicles when they should have. It took years before issuing a safety recall. Now the report is public and it concludes it doesnt appear to be a case of coverup or conspira conspiracy. Instead the failure to recall the vehicles was a case of imco imcomptence and neglect. I still have questions about the whether the employees willingly withheld information that could have led to an earlier recall and prevented some of the tragedies that occurred. The facts surrounding the recall are far more concerning than a coverup. The employees giving the facts and who were tasked to figure out what went wrong didnt connect the dots because they were incomptent and different. I want to know how it happened and why it happened. Even when a good law like the tread act of 2000 is in this it requires people to use common sense and have a moral code. Here the key people at gm lacked all of this in a way we cannot underscore common sense and mandate morality or litigate com position. It has to be beyond paperwork and rules. The failures at gm remember accountability and culture. If they dont have the ability to do the right thing recognize things being wrong the answer is to change the people or the culture. That is a lesson under congressional scrutiny take note of and i hope officials in the Veterans Affairs are watching. The company appeared in no great hurry to figure out the problems disspite customer complaints and engineers they were able to turn off the ignition and finally reports of death. It wasnt until 2009 gm discovered there was any finding of the air bag to the power mode and then it took more years ling that to the ignition switch. That was raised in the lawsuit of a woman who died behind the wheel of a cobalt. How does this discovered . An investigator took two switches apart, something gm failed to do over seven years in the investigation of cobalt nondeployment of airbag. Mary barra you have publically acknowledged how troubleling have been. You have taken corrective action by changing procedures and trying to remove the road blocks to make sure safety concerns come to life. There are no easy fixes for the bro breakdowns that permitted engineers to look too a faulty issue. This concerns me and us all. We learned monday that the gm announced another recall. It is similar to the cobalt ignition switch. Buicks, chevy and cadillac ignition moves out of the run if the key has too much weight on it calling the vehicle to turn off and stall. It goes back to the vehicles from 2000. It doesnt tell us if gm made discovery during lawsuits that prevented the truth from coming out. I want to delve deeper into that and see if that occurred. A harder question for you ms. Barra to solve is why this happened. We know engineers approved a cost that didnt meet your concerns why . When complaints were raised about the cobalt ignition switch why wasnt it diagnosed as a safety problem . Is this something less specific but more difficult to address . A culture that doesnt accept responsibility or responsibility of problems. There was little to no evidence this troubled anyone. This is poor information sharing and silos and a failure to properly document change orders. We have known for year we had an airbag situation that is not working and why wasnt it asked what will be do about this. Thank you for being here. I will turn to the next speaker why are trying to undo the facts that led to the most tragic recall in the decade and that is the faulty ignition switches in the gm vehicles that we know have caused over a dozen deaths. These switches were bad from the start. They should have never been installed and once they were installed it became clear to gm officials that something was very, very wrong with them. Disturbingly the company left these unsafe vehicles on the road for over a decade. You have done important work describing how a defect known to gm employees for over a decade went unaddressed for very long. This describes engineering and investative failure, a lack of addressing issues, poor communication within the company and numerous other systemic problems. And it failed to inform customers and federal regulators of the problem. The report doesnt answer all of the key questions. It doesnt exchange how the ignition switch was approved without meeting specifications and then redesigned in 2006. It doesnt explain why stalling wasnt considered a safety issue. And as the chairplano eluded to the report doesnt show how this culture took root and persisted. The report singles out many individuals at gm who made poor decisions or failed to act, but it doesnt identify one individual in a position of high leadership who was responsible for the failures. The report has previous ceos, the legal depart and the gm board is left from knowing about the tragedy before. This is nothing to be proud of. That the most senior representatives didnt know about a problem that caused a dozen deaths. Ms. Barra you a mew ceo, but you have a decade long history with gm. You were executive Vice President of Global Development and the gm staff responsible for safety reported or through a chain of command to you. At least one high level executive who was working on solutions to the ignition switch problems reported directly to you. So while you may not have known about the defect many people that work are you did. The culture of the company is shaped by their Senior Leadership. They set the tone and attitudes of employees. They are also responsible for putting in place systems to foster transparency and those systems failed at gm. I want to know specific examples of how the culture can be changes to encourage reporting of problems not just structural management changes. I appreciate the changes you have made so far, ms. Barra, but i can i think the jury is still out on whether we can have success in the culture. And monday evening, just a couple days ago, another 3. 3 million cars with ignition switch and engine shutoff issues were recall including chevy impalas in production. Gm has announced 44 recalls this year alone affecting more than 20 million vehicles worldwide. This record reinforces the notions that the safety problemwise the cobalt and ion were not unique and the senior leaders, including you, should have responded to the cultureme culturement. We need to show the changes announced will address the longstanding issues at g. M. And in these last few minutes i want to acknowledge the families who are here in the hearing room today and their beloved loved ones with the pictures on the back wall. I know it isnt easy to learn about so many things with g. M. , you have my word that we will do our best to make sure this kind of tragedy will never, never happen again. And i know we can Work Together in a bipartisan way to do that. Recognize the chairman of the full committee mr. Upton. Thank you for returning to the committee ms. Barra as you said you would. Three months ago he held a hearing on this and asked a lot of tough questions but only got a few answers. I expect things different today. Our investigation tracks with the findings of the report that a maddening and deadly breakdown over a decade plagued by misopportunities and disconnects. Engineers didnt think about how the system linked together. They believe a car stalling while driving wasnt a safety concern. Despite having prove before their eyes an airbag system wasnt deploying when it should have. Employees avoided taking responsibility with the of the head. Ms. Barra, you have said you found the report deeply troubling as well. I find it very disturbing and downright devastating to you, to gm, to folks in michigan who live and breathe pride in the auto industry, but most of all to the families of the victims. The recall announced on monday this week makes it painfully clear that this is not just a cobalt problem. A new set of vehicles including multiple chevrolet, cadillac, buick models are facing an ignition switch recall for the very same kind of torque problem that lurked for over a decade in the cobalt and similar small vehicles with fatal consequences for unsuspecting drivers, including two teens from my own community. Ms. Barra, mr. Valukas, many questions today will focus on how and why this happened. I intend to focus on how we can make sure it never happens again. A culture that allowed safety problems to fester for years will be hard to change. But if gm is going to recover and regain the publics trust, it has to learn from this report and break the patterns that led to this unimaginable systemic breakdown. I want specifics on whether the changes youve already put in place really have made a difference. With the valukas report gm has provided an assessment of what went wrong. I want to be clear today that our information does continue. This committee has reviewed over 1 million pages of documents and interviewed key personnel from gm and ntsa. While were addressing gms actions in response today we will address ntsas part of the story in the near future. We dont yet have all the answers about what changes in our laws, the regulators practices or the companys culture would have prevented this safety defect from lingering so long or harming so many. But were going to find out. Yes, we will. The system failed and people died, and it could have been prevented. I yield the balance of my time to dr. Burgess. I thank the chairman of the full committee for yielding. We now know this is not an evidence problem. The evidence is simply overwhelming. Its an analysis problem. General motors still needs to answer the fundamental question of how it missed all of these glaring signs. Indeed, failure to recognize the problems in a timely fashion may well have cost 13 people their li thug this report isve this report is troubling and while everyone had responsibility to fix the problem, no one took responsibility. And that is not acceptable for one of americans Flagship Companies and one that millions of us relay on every day. According to the report, there are 90 recommendations to the problems and the failures that led to the ignition recall. I am certain all 90 are crucial but only one, accountability and accountability that is not transferrable is crucial. If person accountability is mussing as the report suggests, than dist disastrous consequences will occur and reoccur. This is the first step to solving the problem identifying it. I hope also there are some answers for many of us as to effect and understanding of the problem and will this effect the cases that have been litigated and how does g. M. s bankruptcy affect the position on the cases that were previously litigated and perhaps we can touch on mr. Feinbergs employee. He is an employee of g. M. Or working for the crash victims. All of these questions need to be answered and i look forward to your testimony and thong. I thank you mr. Chairman for holding this hearing. The second on the failure to recall g. M. Vehicles Nathaniel Philbrick in a timely manner. The families of the victims of g. M. s defective vehicles deserve better. G. M. Failed you. And we are looking at the pictures in the back of the room and they need more than an apology. On june 5th, a review of g. M. s ignition switch failures and his report was released on june 5th. The report characterized g. M. As a company with a con voluted structure and a place where there was an institutional failure it work with different departments. There is a story about a whistle blower to tried to bring the attention to the company and lost his job as a result. During the previous appearance before the submity ms. Barra pointed to the report and addressing the many questions she wasnt able to answer and i look forward to getting answers to the questions today. A question i raised at my last hearing has yet to be answered and that is how g. M. Is going to c compensate injured or those who lost loved ones. Ms. Barra said it would take her and ken who was designed on how to establish a victims fund up to 3060 days to determine how to proceed with the claims. It has been 79 days so i hope we will get the answers today. When the report became public quote we failed these customers and must face up and learn from it. 15 g. M. Employees have been dismissed but it isnt clear that any senior level manager has been held responsible for the g. M. Corporate culture that allowed the ignition switch defect to go unaddressed for years after being first discovered in 2001. The question is how far does this extend to g. M. . Purchasing supply from 2011 until taking over as ceo ms. Barra was, from may understanding, responsible for safety issues. He was unaware that serious questions should have been asked about the defect. Two newspapers addressed the defect in 2005. If i were a senior level executive that read about that in the newspaper i would want action. The report make ss suggestions change the corporate climate to respond faster and better and that improves including communication with the Traffic Safety administration and i look forward to hearing from ms. Barra about the changes the company has already made and its plans for future improvements. That is not enough a deterant with a company over 150 billion in revenue. Sounds like a slap on the wrist. I am an cosponsor of hr 4064 which increases the penalties of informing the public of the defects. I am working on legislation that would do the same while also addressing several other issues raise by the defect including requiring the Public Disclosure of technical bulletins and they provide information to dealerships about how to experience a wide spread problem. In g. M. s case, tcb were issued for the faulty switch. In 2005, ten years before a recall, they were instructed to replace the part. I hope todays hearing will allow us to consider additional action that might be needed for recalls. I look forward to hearing from the witnesses and i yield back. Thank you. I would now like to introduce the witnesses on the panel for todays hearing. Mary barra is chief executive officer for General Motors i would like to introduce mary barra who has been with the company 30 years and held a number of positions within the company crowing Vice President of global manufacture and engineering from 20082009 and executive direct of vehicle manufacture from 20052008. We have a lit gator here and a former u. S. Attorney and a fellow of American College lawyers. He is the author of the report on the findings that were released two weeks ago. I will now swear in the witnesses. You are aware the committee is holding an investigative hearing and has the practices of taking testimony under oath. Do you have any objection inboth witnesses say they dont. Under the rules of the house and committee you are entitled to be advised by counsel do you either advise . Both decline. Thank you. In that case if you would raise your right hand, i will swear you in. Do you swear the testimony you are about to give is the truth and whole truth and nothing but the truth . Thank you. Both answered in the afirmm afirmmitive. Ms. Barra please pull the mike close and turn it on as well. Thank you. Thank you, mr. Chairman. I appreciate the chance to appear before you again today on the ignition switch issue. Before i proceed with my brief remarks i want to again express my sympathy to the families that lost loved ones and those who suffered physical injury. I am mind full we have a special responsibility to them and those families and the best way to fufill that responsibility is to fix the problem by putting in place the needed changes to prevent this from ever happening again. When i was here 11 weeks ago, i told you how we intended to proceed with this matter. I promised we would conduct a transparent investigation into the causes of the ignition switch problem. I promised we would hold people accountable and make changes in the approach to recall. And i promised we would develop a program to comensate those who lost loved ones and suffered injuries. We have done this and more. The report as you know is thorough, brutally tough, and deeply troubling. It paints a picture of a company that failed to handle the situation in the right way. This is enormiously painful for those who dedicated their live to the company. There is no way to minimize the seriousness of what was discovered. On june 2nd they were presented to the board of directors of g. M. I will leave it to him to comment on the report but i want you to know my reaction to the report and some of the actions i have taken since reviewing it. First, we have made a number of personal decisions. 15 individuals identified in the report are no longer with the company. We have restructured our safety Decision Making process to raise it to the highest levels of the Company Addressing a key point in the report that critical information was kept from management. Under the new system this shouldnt happen again. We are conducting what i believe is the most exhaustive safety review in the history of our company. We are leaving no stone unturned and devoting whatever resources it takes to identify potential safety issues in our Current Issues and on vehicles no longer in production. Our responsibility is to set a new norm and a new Industry Standard on safety and quality. I have told our employees it is not enough to fix the problem. We need create a new standard and we will create a new norm. We have announced the creation of Integrity Organization that is enhancing the safety of our product and we are taking an aggressive approach on recall and bringing greater rigor and discipline to our analysis and Decision Making process regarding the recalls and other safety related matters. It is difficult to announce so many recalls but it is the right thing to do. As we discuss last time we have engaged kenneth for the Compensation Program and the process is moving rapidly. He has indicated he is going to share the criteria this month and we expect to process claims by august 1st. We created the Vehicle Safety position and appointed a specialist in the field for this position. We are named a senior attorney to support that position and facilitate rapid information sharing across the organization. We added 35 safety investigators t