GM CEO Barra, Attorney Valukas To Testify On Capitol Hill June 18

By Dow Jones Business News, 
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By Jeff Bennett and Siobhan Hughes

General Motors Co. ( GM ) Chief Executive Mary Barra will return to Capitol Hill next week to face another round of questioning from lawmakers who are expected to challenge findings of an internal report criticizing the company's culture but clearing the CEO and other high-level executives of wrongdoing in connection with a long-delayed recall of cars with a dangerous ignition switch defect.

Ms. Barra is scheduled to testify before the House Oversight and Investigations Subcommittee on June 18. Chicago Attorney Anton Valukas, who was hired by GM to investigate the recall delays, is also expected to testify. Both will likely testify before a Senate subcommittee, although those details haven't been released.

"Mr. Valukas' exhaustive report revealed disturbing truths about GM's systemic and cultural failures that allowed this problem to go undiagnosed for over a decade, but many questions remain unanswered about the recalls and resulting changes within the company," Energy and Commerce committee Chairman Fred Upton (R-Mich.) and Oversight and Investigations Subcommittee Chairman Tim Murphy (R-Penn.) said in a joint statement. "This testimony by Barra and Valukas is a critical step in our ongoing investigation to uncover the facts as we determine what went wrong and what we can do to prevent future tragedies."

Lawmakers are investigating why GM waited for 11 years to recall 2.6 million defective cars. The switch issue has been linked by the company to accidents resulting in 13 deaths although the auto maker has said the number could be much higher.

During testimony in April, Ms. Barra declined to answer many of the questions posed by lawmakers, saying she wanted to wait for Mr. Valukas's findings. The report, released last week, painted an unflattering picture of a GM bureaucracy in which senior managers shirked responsibility and lower-level engineers either concealed or overlooked vital information.

The company says 15 people have left the company as a result of the findings, including engineers, lawyers and senior executives who dealt with regulatory matters. Five others were disciplined. Ms. Barra has declined to identify the individuals dismissed or sanctioned, or provide details beyond those contained in the report.

However, congressional leaders are expected to question Ms. Barra further on how higher-level lawyers and executives, such as herself, could be unaware of a problem that existed for so long. The company has turned in more than one million pages of documents to the House regarding the ignition switch.

Ms. Barra has spent her entire career at GM and headed up the auto maker's product development and engineering operations from 2011 to early 2014. Ms. Barra says she didn't know about the ignition switch issue until December 2013, and didn't learn many details of the case until Jan. 31, 2014, after a committee of lower-ranking executives decided to initiate the first recall of cars equipped with the faulty switches.

Separately, GM intends to meet Friday's deadline to pay a $35 million fine levied against the auto maker by the National Highway Traffic Safety Administration. The safety agency fined the company for its failure to report the problem and initiate a recall in a timely manner.

The company will also pay an approximate $430,000 fine by July 5 for failing to answer all of NHTSA's questions related to the recall by April 3. The agency wanted GM to answer 107 outstanding questions based on materials the company had submitted to the agency in February and March.

GM, playing for time as it awaited the Valukas report, missed the April 3 deadline triggering the $7,000 daily fine. NHTSA began fining the company on April 4 and ended on June 5.

"With the Valukas report, that wrapped things up," and aide to U.S. Department of Transportation Secretary Anthony Foxx said on Tuesday.

Corrections & Amplifications

This item was corrected at 1:40 p.m. ET because it incorrectly, in the sixth paragraph, said five other people were dismissed by the company. The five were, in fact, disciplined.

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