News / USA

US Senators to GM: Why Wasn't Top Lawyer Fired?

GM CEO Mary Barra pauses while testifying on Capitol Hill in Washington, July 17, 2014, before a Senate Commerce subcommittee hearing examining accountability and corporate culture in wake of the GM recalls.
GM CEO Mary Barra pauses while testifying on Capitol Hill in Washington, July 17, 2014, before a Senate Commerce subcommittee hearing examining accountability and corporate culture in wake of the GM recalls.
Reuters

U.S. senators on Thursday demanded to know why General Motors Co did not fire its top lawyer after it was revealed this year that the automaker's litigation department knew of a widespread and deadly ignition flaw but failed to escalate the safety issue.

GM Chief Executive Mary Barra defended General Counsel Michael Millikin as “a man of incredibly high integrity” during the Senate Commerce subcommittee hearing at which both appeared.

But senators said Millikin should be held responsible for lower-level lawyers who for years worked on private lawsuits involving deadly crashes in which a vehicle's ignition switch could slip out of position, causing the car to stall, disabling air bags, power steering and power brakes.

“I do not understand how the General Counsel for a litigation department that had this massive failure of responsibility, how he would be allowed to continue in that important leadership role in this company,” said Senator Claire McCaskill, chairwoman of the Senate Commerce subcommittee.

GM has attributed a total of 16 deaths to ignition-switch failures across its product lines, including at least 13 deaths and 54 crashes stemming from the specific defect discussed at Thursday's Senate hearing and which was found mostly in Chevy Cobalts and Saturn Ions.

Millikin responded repeatedly that he did not know about the safety risks posed by the ignition switch until early February of this year, shortly before the company issued its first public recall for the issue.

Millikin admitted that GM lawyers who worked on an April 2013 case involving a fatal crash had enough information to alert GM engineers, but they did not take action.

“That was tragic. If they had brought it to my attention at that time, I certainly would have made sure that they had done something,” he said.

Lower-level lawyers are among the 15 people GM has dismissed in the safety debacle that has resulted in millions of recalled vehicles.

Barra said she disagreed with the notion that Millikin should be fired.

“He's the person I need on this team. He had a system in place,” she said. “Unfortunately, in this instant it wasn't brought to his attention frankly by people who brought many other issues forward.”

Prior to the series of ignition-related recalls that began in February, GM attorneys had permission to settle lawsuits for up to $5 million without notifying Millikin. GM changed that policy after the recall crisis.

GM has also hired large law firm Quinn Emanuel Urquhart & Sullivan, primarily known for litigating business matters, to review the automaker's litigation practices, according to one of the firm's managing partners, John Quinn.

Millikin told senators he has already reorganized the legal staff to report directly to him, and that he will personally review for engineering issues any case involving a fatality or serious injury that goes to trial or a settlement.

Delphi dodges blame

Also appearing before the committee on Thursday was Rodney O'Neal, the chief executive of Delphi Automotive, the maker of the defective part. It was his first public appearance before Congress.

Delphi has so far largely avoided the harshest criticism from lawmakers, and O'Neal on Thursday said his company should not shoulder the blame for the ignition-switch flaw.

O'Neal said Delphi followed the requirements dictated by GM in making the part, which was designed with low resistance because GM wanted it to turn smoothly.

“GM knowingly approved a final design that included less torque than the original target,” O'Neal said in prepared testimony. “In our view, that approval established the final specification.”

GM CEO Barra accepted that the part's design was the fault of her company and not Delphi's.

The Justice Department is not targeting Delphi in its criminal probe of GM's handling of the safety defect, according to sources familiar with the investigation.

O'Neal said Delphi has four production lines running to make replacement ignition switches. He said Delphi has shipped more than one million new switches and is on track to deliver more than two million by the end of August.

Bankruptcy shield

Senators also pressed GM officials and outside lawyer Kenneth Feinberg about how the automaker plans to compensate victims. GM has appointed Feinberg to set up and administer a fund for victims.

Millikin told the senators that GM would not consider waiving bankruptcy protection outside of the fund.

That protection was granted to the automaker by the terms of its 2009 exit from bankruptcy, which created the so-called New GM and left liability for accidents that occurred prior to its bankruptcy exit with what remained of “Old GM.”

GM has asked the Manhattan judge who oversaw that bankruptcy to rule on whether certain claims are blocked by those terms, in a pre-emptive move aimed at holding off dozens of lawsuits from customers who say they suffered financial losses from the recall.

Barra said GM sees no need to expand the compensation fund to cover other cars with bad switches outside the initial recalls.

You May Like

Video Is West Doing Enough to Tackle Islamic State?

There is growing uncertainty over whether West’s response to ISIS is adequate More

China Crackdown on Dual Citizens Causes Concern

New policy encourages reporting people who obtain citizenship in another country, but retain Chinese citizenship; move spurs sharp debate More

Video Coalition to Fight Islamic State Could Reward Assad

Losing ground to Islamic State fighters, Syria's government says it is ready to cooperate with international community More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Is West Doing Enough to Tackle Islamic State?i
X
Henry Ridgwell
August 29, 2014 12:26 AM
U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Pachyderms Play Polo to Raise Money for Elephants

Polo, the ancient team competition typically played on horseback, is known as the “sport of kings.” However, the royal version for one annual event in Thailand swaps the horse for the kingdom’s national symbol - the elephant. VOA Correspondent Steve Herman in Samut Prakan reports that the King’s Cup Elephant Polo tournament is all for a good cause.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.
Video

Video America's Most Popular Artworks Displayed in Public Places

Public places in cities across America were turned into open-air art galleries in August. Pictures of the nation’s most popular artworks were displayed on billboards, bus shelters, subway platforms and more. The idea behind “Art Everywhere,” a collaborative campaign by five major museums is to allow more people to enjoy art and learn about the country’s culture and history. Faiza Elmasry has more.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Uneasy Calm Settles Over Israel, Gaza Strip

Israel and the Gaza Strip have been calm since a cease-fire set in Tuesday evening, ending seven weeks of hostilities. Hamas, which controls Gaza, declared victory. Israelis were more wart. VOA’s Scott Bobb reports from Jerusalem.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. Shaikh Azizur Rahman reports from Kolkata.
Video

Video Scientists Unlock Mystery of Bird Flocks

How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.

AppleAndroid