Former head of the National Highway Traffic Safety Administration (NHTSA), Joan Claybrook, has weighed in on the deadly delay by General Motors on a recall for a defect that is alleged to have resulted in 13 deaths and 33 accidents. Ms. Claybrook appeared on the Cavuto Show on Fox Business where she blasted both GM and NHTSA for waiting 10 years to recall the defective models and went as far as saying that there should be criminal charges brought against GM by the Justice Department.
Congress was questioned for its response (or lack thereof) as Cavuto started the segment by comparing the lack of hearings on the recall delay to the quick response that brought Toyota to task for its unintended acceleration problems. It’s hard to disagree that Congress has been unusually silent on the matter, perhaps as a result of being concerned with the risks of criticizing the politically-powerful GM. Cavuto also came down hard on GM, which he suggested “has got away with, what looks like murder.”
Cavuto went on to question the adequacy of the potential maximum fine of $35 million comparing it to the $13 billion in fines levied against JP Morgan Chase for mortgage related violations “that didn’t kill a soul.” Ms. Claybrook agreed with the sentiment stating that “it’s hard to believe that they (GM) could bury this for that long.”
Ms. Claybrook joined in the criticism of the double-standard of the response to GM compared to the lambasting of Toyota for its recall issue saying, “I don’t think there is that much difference” between the two companies recalls and suggested a cover-up by both companies. She called the GM defect “a terrible defect” and it was “outrageous” that GM did not recall its vehicles sooner.
Congressional action was called for by Ms. Claybrook and she suggests that the fines should increase to the $200 million range. She also thinks that GM is subject to criminal penalties from the Justice Department. It will be interesting to see if GM’s cronies in the Obama Administration feel the same way.
The lack of comments or apologies from current GM CEO, Mary Barra, was also noted. Ms. Barra was employed at various positions for much of the 10 years that GM was delaying the recall that may have led to 13 motorists dying. When the Obama-appointed management placed her in the position of head of product development in early 2011 to groom her for the CEO position, she would have been responsible for quality control and should have addressed the problem.
NHTSA itself needs to be accountable for the 13 deaths, as well. What did they know and when did they know it? Did cronyism and favoritism lead to a cover-up to protect the Obama-friendly GM along with its UAW membership which is a major holder of GM stock?
The Detroit News reported more from Ms. Claybrook regarding NHTSA’s actions, quoting her as stating, “NHTSA’s own gross failures to require a recall over the last decade for these vehicles also raise questions about whether the agency can be the cop on the corporate beat, alert to protecting the public safety, as the Congress intended.” I would go further than that and question whether or not our government should be able to intrude in private industry and nationalize a company, as they did with GM, and then be put in charge of regulating a company that was so politically important to the President that he campaigned on its success as a platform for his reelection bid.
Media coverage seems to be the only protection for US citizens against such unethical behavior by politically-connected corporations like GM. Congress and government agencies like NHTSA do not seem to act in the best interest of those they are supposed to serve. Some in the media, like the NY Times and the USA Today have done a great job exposing the story of GM’s apparent defect cover-up. The latest piece from the NY Times continues to criticize both GM and NHTSA on their actions with the following:
For a resurgent General Motors, which has twice apologized, the recall is a major embarrassment as it tries to escape the shadow of its bankruptcy and government takeover. It has been sued, and now faces an investigation by the safety agency and the possibility of a criminal investigation, similar to the criminal inquiry Toyota is facing after recalls over the unintended acceleration of its vehicles.
The G.M. recall, which started on Feb. 13 with 619,000 cars in the United States before more than doubling last week, also poses the first big test for Mary T. Barra, G.M.’s new chief executive, who has promised a relentless focus on consumers. Ms. Barra, a career G.M. employee who the automaker said was not involved in the Cobalt’s development, has made no statements about the recall and was not available for an interview on Sunday, said Greg Martin, a G.M. spokesman.
Additionally, G.M. has not made anyone available to answer questions about the recall, offering only public statements and what it has filed with regulators.
The recall is also an embarrassment for federal safety regulators. After two of the Cobalt crashes, the regulators took a close look at the cause, each time raising the possibility of a defect. They also met with G.M. about the issue. But despite the red flags, they never opened a broader investigation into whether the car was defective.
“It was a complete failure of the system,” said Clarence Ditlow, executive director of the Center for Auto Safety, a nonprofit consumer advocacy group. “They got away with it because N.H.T.S.A. never opened an investigation.”
The General Motors recall prompts me to write my first letter to the editor. The delayed and piecemeal recall of the Cobalt and other cars with defective ignition switches is not only a business ethics failure, but also an individual moral failing by those GM individuals responsible.
Hopefully, there will be criminal proceedings instituted. And, don’t forget, this was the company we taxpayers bailed out.
But I also wonder about the lack of public comment by new GM CEO Mary Barra. She and GM certainly got the publicity and praise when she was announced. Where’s the publicity now?
That USA Today piece was titled “Trust in GM Shaken: Your Say.” My say is that trust in GM has been shaken since the unethical intrusion of the Obama Administration which trampled contract law and favored politically-connected groups like the UAW over less-favored groups like GM bondholders and then seeing GM go on to lie about demand for politically-motivated and taxpayer-subsidized vehicles like the Chevy Volt.
Taxpayers funded a bailout of GM with billions of dollars that essentially was a payment to help with the President’s reelection bid. Only now that human lives have been lost may we see some skepticism regarding the “success” of GM. And that is still not even a given if GM is able to use its war chest of taxpayer-provided money along with its political clout to muscle its way out of the justice that the victims deserve. Let’s hope that Congress acts appropriately and that the media coverage is as prominent as it was with the Toyota hearings.
Mark Modica is an NLPC Associate Fellow.