The US congressional investigation into General Motors‘ vehicle defects investigation and reporting process will bring aggressive scrutiny to a company with powerful lobbying clout and strong ties on Capitol Hill, a Reuters report noted.
The recall of 1.6m vehicles, due to an ignition switch problem linked to 12 fatalities, has made the automaker a Congress target with potentially dramatic hearings kicking off in April, the news agency said.
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GM chief executive Mary Barra is scheduled to testify on 1 April to a US House of Representatives panel investigating the ignition problem. In what could be a preview of such testimony, Barra on Monday declared in a video that “something went wrong with our process” and “terrible things happened.”
The handling of the defect by GM, which first noticed it in 2001, and federal regulators is the top priority of the powerful House Energy and Commerce Committee, aides told Reuters.
Congressional investigations into consumer safety issues always have the potential of becoming a public relations nightmare for companies at the centre of the probes, the report noted.
In early 2010, for example, Congress looked into sudden, unintended acceleration problems Toyota owners had been reporting for years, which were linked to five deaths.
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By GlobalDataBefore it was all over, Toyota sales fell, its reputation suffered and Congress toughened regulations, Reuters said. Just this week, the company agreed to a record US$1.2bn penalty stemming from a Justice Department criminal investigation that could provide guideposts for the GM probe.
The report said the House Energy and Commerce Committee would have broad powers to investigate the actions of GM and the National Highway Traffic Safety Administration (NHTSA), including the ability to subpoena witnesses and documents. The panel has also invited NHTSA acting administrator David Friedman to testify at the 1 April hearing.
The session is the first in what will likely be a series of congressional hearings.
GM customers could have dramatic stories to tell, since the ignition issue turned off engines and disabled airbags in cars moving at high speed, resulting in deadly accidents, Reuters said.
One committee aide said nearly a dozen of the panel’s investigators were working on finding out why flawed ignitions in older Chevrolet Cobalts, Saturn Ions and other GM models were allowed to stay in the cars for so long with owners uninformed.
“The broad question the committee wants to answer is, ‘Is this a problem that could have been prevented or detected any earlier than it was?'” one House Energy and Commerce aide told Reuters.
But GM has long had allies in Congress, most notably Michigan Representative John Dingell, the former committee chair. But the hearings will not be the first time the auto giant has been roughed up by lawmakers.
In 2012, a House of Representatives committee looked into an unrelated safety issue: battery fires in GM’s then new hybrid electric car, the Chevrolet Volt. In 2008, GM, Ford and Chrysler executives were taken to task by some members of Congress when they flew corporate jets from Detroit to Washington to testify in favor of a government bailout.
GM’s allure may have suffered so much from its subsequent government takeover that only four members of Congress, out of 535, owned the company stock in 2012, according to the Center for Responsive Politics.
Five CEOs ran GM during the period of more than a decade since the ignition problem first appeared.
According to Reuters, some aides also warned that what might appear in hindsight to be inexcusable mis-steps by GM and federal regulators could have been complex and hard-to-define problems as they were unfolding.
The House hearings will be run by Michigan Representative Fred Upton, a Midwesterner with an unassuming demeanor, who, Reuters noted, sometimes tells reporters, “Just call me Fred.”
As chairman, Upton has aggressively challenged President Barack Obama’s administration on its Obamacare health plan and guided his committee through a tough investigation of the Solyndra solar-panel company, which filed for bankruptcy in 2011 after receiving $528m in loans from the federal government.
Upton also played an important role in the 2000 congressional investigation of Ford’s SUV rollover problems associated with Firestone tyres.
After emotional hearings, Congress quickly toughened the industry’s recall process.
Joan Claybrook, a former NHTSA head and president emeritus of the watchdog group Public Citizen, told Reuters that, “from time to time,” Congress had proven it can be tough on the US auto industry.
She noted that during the Ford/Firestone investigation, Congress demanded that the companies “submit all sorts of documents they didn’t want to submit” and made them public.
Claybrook and fellow consumer advocate Ralph Nader said in separate telephone interviews with the news agency that the scope and aggressiveness of Congress’ investigation of GM would depend in part on sustained public outrage and pressure to act.
“The public is mad as a hornet about this GM coverup,” she said.
Nader, who wants GM to set up a victims’ compensation fund, said the hearings would help “keep the fire under the seat of the Justice Department” as it pursues a criminal probe.
Republicans, who control the House, will not want to ally with GM on a safety problem that has enraged the public, added Nader, who won fame in the 1960s by taking on GM [over the Corvair] and championing safety issues in his book Unsafe at Any Speed.
If House lawmakers or Senator Claire McCaskill, a Democrat who also plans to hold hearings in April in her Commerce Committee panel, decide legislation is needed, GM’s lobbyists are sure to respond, Reuters predicted.
With 87,000 hourly and salaried workers in 60 plants scattered across the United States, GM and its employees are an important constituency for lawmakers.
GM spent nearly $9m last year on an army of lobbyists whose job is to promote the company’s interests in Congress and throughout the federal government. One registered lobbyist, Emily Porter, is a former adviser to House Speaker John Boehner.
Asked about GM’s sway with Congress, veteran Democratic Representative John Larson of Connecticut told Reuters: “It always makes it problematic for Congress” because so many of the company’s jobs are located in lawmakers’ home districts.
Still, House Energy and Commerce aides insisted GM would get no favourable treatment. “You have one hearing and you see where the evidence takes you” before deciding next steps, one aide told Reuters.
