GM 'ignored early warnings' on cars with faulty switches

Randall Rademaker puts up a picture of his daughter, Amy Rademaker, w Randall Rademaker's daughter, Amy, was killed when the driver of the Cobalt she was in lost control of the car

US lawmakers allege that General Motors ignored early employee warnings about a faulty ignition switch dating back to 2005.

Facing intense questioning over GM's handling of the safety scandal, Ms Barra said she was not aware of an email from GM engineer Laura Andres.

Ms Andres warned GM had a "serious safety problem" with switches in the 2006 Chevrolet Impala she was driving.

She said this could lead to "a big recall".

The email from Ms Andres was just one of several pieces of evidence lawmakers displayed during Ms Barra's second Congressional hearing this year after announcing a recall in February for cars affected by the faulty switches.

At least 13 deaths have been linked to the part, and lawmakers alleged that GM knew of problems for over ten years but failed to alert drivers that they could be at risk.


Before the hearing began, a dozen family members of victims quietly entered the room and placed pictures of their loved ones on the wall.

As the hearing began, the father of a 15-year-old girl who died in a GM car with a faulty ignition switch had tears in his eyes. His lower lip was quivering. Despite the years that have passed since his daughter's death, his pain is still very raw.

It is these family members who are desperate for answers. Why did it take so long for GM to recognise the problem and why did their loved ones have to die in the process?

An internal audit of GM identified a culture problem within the company. Some 15 people have been dismissed. And GM chief executive Mary Barra is taking full responsibility for what happened.

But that still comes as little comfort to the family members of the victims here today.

'Culture of secrecy'

In prepared testimony, Ms Barra said the firm accepted a "brutally tough and deeply troubling" report into why the carmaker failed to issue a recall or safety notice earlier, after the problems had been reported nearly ten years ago.

She promised that changes had been made to alter GM's "culture of secrecy" and said that those responsible for failing to report the problem had been disciplined or fired.

The report - which was carried out by former US Attorney Anton Valukas - exonerated Ms Barra and other top executives, saying that lower-level employees failed to alert them to the safety issue.

Many lawmakers expressed scepticism that Ms Barra, who was head of product development for a period before rising to leadership, remained unaware of the problem with the switches.

Ms Barra said that Kenneth Feinberg - the man tasked with setting up and administering a compensation fund for victims - would release his criteria for victim compensation by the end of this month.

She said that the fund would cover any person who suffered a serious injury due to the ignition defect.

Still buying

The hearing came days after GM announced another recall of 3.2 million cars.

In total, the firm has recalled 44 million cars this year - significantly more than the total vehicles it sold in 2013.

Chevrolet dealership US car buyers seemed unmoved by GM's safety recalls - the firm reported its best May sales in seven years

Safety actions have cost GM a total of $2bn (£1.2bn) this year.

That includes the $35m the carmaker was fined by the National Highway Traffic Safety Administration (NHTSA) for its failures to report the safety defect. That was the maximum amount allowed under US law.

Separately, the NHTSA said on Wednesday it was opening two new investigations into a similar problem in some Chrysler cars.

Overall, US car firms are set to recall a record number of vehicles this year.

But US car buyers seem to be taking the recalls as a sign of improving safety in the industry.

GM reported its best May sales in seven years a few weeks ago, and its share price is just above what it was when the firm announced the first round of recalls on 13 February.

More on This Story

Global Car Industry

More Business stories


BBC Business Live


    HSBC has told three Muslim organisations it will close their bank accounts. These are the Finsbury Park Mosque in North London, a think-tank on Islamic issues called the Cordoba Foundation based in West London, and a Muslim charity in Bolton called the Ummah Welfare Trust, which works in 20 countries giving aid. HSBC says the decisions were "absolutely not based on race and religion".

    BANKER BONUSES 06:30: Radio 5 live

    More from Ms Mangwana on Wake Up to Money. She says the proposed seven year rule may be more about changing culture in banking and the way in which bankers view their bonuses. But she also points out bonuses are generally paid in tranches that vest over a number of years, already (commonly anything between three and five years). "That's the current formula and there are [already] mechanisms to reclaim those bonuses," she says.


    In case this happened too late for you, Twitter shares rocketed 30% on stronger-than-expected financial results. Revenue more than doubled in the second quarter. Shares rose to $50 in after hours trading. Still down on its high of $74.73, hit in December.

    BANKER BONUSES 06:10: Radio 5 live

    Samantha Mangwana, employment lawyer at Slater Gordon told Wake Up to Money seven years is a long time to hold a bonus and regulators may well find it difficult to reclaim money. It is highly likely bankers will have gone and spent the money already, she says, and have nothing that the Bank of England can reclaim.

    BANKER BONUSES 06:07: BBC World News
    Tom Stephenson

    Those new rules on bankers' bonuses are expected to recommend a claw-back period of seven years. Tom Stephenson from Fidelity Worldwide on BBC World News says they could have been tougher: "One of the suggestions was that bankers could be jailed for a significant fall in profits - that's quite something isn't it. Even so, being able to claw back bonuses for seven years is pretty draconian."

    06:02: Matthew West Business Reporter

    Good morning folks. It's looking like a busy day today. We also have trading updates from ITV and house builder Taylor Wimpey. As always you can get in touch via email at and on twitter @bbcbusiness

    06:00: Rebecca Marston Business reporter, BBC News

    Welcome again to the Live page. We're going to be banking heavy. There's Barclays results - in about an hour - and later this morning the Bank of England will release new restrictions on bankers' bonuses, said to be the toughest in the world. We'll see.



From BBC Capital


  • A digger operated via an Oculus Rift and a controllerClick Watch

    Why controlling a heavy digger with a virtual reality helmet might improve safety

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.