GM CEO Mary Barra has already faced questioning regarding the recent GM recalls including the massive ignition switch recall. She faced additional scrutiny during a Senate hearing on Thursday where the scope of the questioning by Senators expanded. Furthermore, observers correctly predicted a new and aggressive questioning of GM’s General Counsel, Michael Milikin, as the Senators attempted to determine the legal department’s role in how these defects remained unreported for 11 years. Senator Claire McCaskill praised Ms. Barra’s response to this crisis but had a scathing critique of Mr. Milikin’s performance.
A GM Internal Investigation Revealed Troubling Signs in the Legal Department
Following the discovery of the defects and failures to report, GM commissioned an internal investigation headed-up by former federal prosecutor, Anton Valukas. The report did find problems in GM’s handling of the situation, but critics of the report have been harsh. Sen. Richard Blumenthal (Dem-CT) characterized the report as, “the best report money can buy.” Mr. Blumenthal indicated his intention to question Mr. Valukas about why the report failed to investigate actions by mid- to upper-level management and instead solely focused on actions by low-level managers. Furthermore, some Senators have indicated their desire to determine how a single engineer was permitted to approve a non-conforming ignition switch and then make later changes without approval.
To the report’s credit, it did note that GM lawyers recommended settlement in a number of the defect-related cases. However it appears that the superiors in the legal department, including GC Michael Milikin, were never notified of the problem. On this point Mr. Milikin also directed the blame to low and lower-level GM attorneys. He claimed that it was those lawyers who failed to do their job and claimed that the lawyers who allegedly failed to take action were no longer employed by the company. Milikin claimed that he only became aware of the defect in February 2014.
Delphi CEO Testifies regarding Defective Ignition Switches
Delphi CEO ,Rodney O’Neal, testified before the Senate as well on Thursday. Delphi is the parts supplier that provided the defective ignition switches to GM. At the hearing Mr. O’Neal deflected blame for the defect placing responsibility solely on GM. He stated, “GM knowingly approved a final design that included less torque than the original target. In our view, that approval established the final specification.” He also claimed that Delphi has shipped over 1 million replacement ignition switches and has four production lines. Delphi is expected to have delivered two million replacement switches by the end of August.
What Damage have the Defective Ignition Switches Caused?
To date, GM has identified at least 54 crashes related to the ignition switch defect. A minimum of 13 people have been tragically killed as a result of the defect. However GM has faced criticism and scrutiny for its methodology. For example, GM has been criticized for only counting deaths when the airbag failed to activate. That means if the ignition switch defect caused a car to lose power and go out of control only the driver and individual in the passenger seat would be counted – but only if their airbag failed to inflate. Any passengers in the back seat would not be included in GM’s calculations because there was no airbag there to fail to inflate. Commentators have insinuated that GM’s methodology is designed to limit liability rather than present an accurate picture of damages due to the defect. The simple fact of the matter is but for GM’s defective ignition switch many of the accidents would have never occurred.
As of today, those wrongfully killed, but not impacted by a non-deploying airbag, are not eligible for GM’s settlement fund. Senator Blumenthal questioned fund administrator Kenneth Feinberg about whether the fund should be expanded to cover those impacted by other defects. Feinberg responded by stating that an expansion of the fund was not his decision to make.
If you have been injured or a loved one has been killed by a GM defect, contact an experienced car accident lawyer in Philadelphia today. For more than 34 years the attorneys of The Reiff Law Firm have represented those injured by defective products in New Jersey and Pennsylvania. To schedule your free and confidential legal consultation, contact The Reiff Law Firm by calling (215) 246-9000 or contact us online.