Peter Flaherty's blog

Barra Can't Blame 'Old GM' for Today's Problems

Roll Call mastheadRoll Call published my piece today. It was written before the recall of 1.5 million vehicles for steering loss, in apparent response to our March 19 request.

Why did General Motors wait a full decade to recall more than 1.6 million vehicles that have been connected to 13 deaths and dozens of injuries?

Most of the questions at this week's Congressional hearings will certainly focus on who knew what, and when they knew it. The answers, and how they relate to the 2009 government bailout of GM, could have political and criminal implications. When it comes to questions of vehicle safety, congressional investigators no doubt will find that the bailout only enabled a culture of mediocrity at GM.

GM Recalls 1.3 Million Vehicles With Steering Loss Defect

In apparent response to our request, General Motors announced today that it would recall 1.3 million vehicles that may experience sudden power steering loss.

We made the request on March 19 after NLPC Associate Fellow Mark Modica found a glaring anomaly while examining documents on the National Highway Traffic Safety Administration (NHTSA) website. NHTSA had already ordered a recall in March 2010 of Chevy Cobalts and Pontiac G5s for the steering loss defect but three years later had not yet ordered a recall of Saturn Ions, which have the same power steering system. In my March 19 letter to GM CEO Mary Barra, I wrote, "We do not know why NHTSA has not already ordered a recall or whether politics enter into its decision-making process.  It doesn't matter. You have the authority to immediately recall these vehicles."

GM Asked to Recall 382,000 Vehicles With Steering Loss Defect

GM recallThis letter is being sent today to GM CEO Mary Barra:

We ask that General Motors (the Company) recall Saturn Ions for the model years 2004 through 2007 without further delay.

These automobiles endanger the lives and safety of their drivers and passengers due to a loss of power steering, a serious problem of which the Company has been aware for several years.

According to a summary of an ongoing investigation by the National Highway Traffic Safety Administration (NHTSA):

...GM indicated that the EPS (electric power steering) system used in the subject vehicles was the same as that used in the MY2005 to 2010 Chevrolet Cobalt and Pontiac G5. In March 2010, GM recalled approximately 1.05 million Chevrolet Cobalt and Pontiac G5 vehicles (NHTSA recall no. 10V-073) to correct a defect with the EPS assist motor.

Questions Upton Committee MUST Ask GM About Recall Delay

Fred Upton photoThe following letter was sent today to Rep. Fred Upton (R-MI), Chairman of the House Energy and Commerce Committee:

As your committee prepares for the upcoming House Energy and Commerce Committee hearing on the recent GM recall, I urge you to use every opportunity to examine what, if any, influence the U.S. government's ownership of GM has had on this troubling failure to address the dangerously flawed vehicles. In addition, we urge your committee to consider posing the following questions to panelists at your hearing:

NY Times Profiles Menendez Donors

MenendezIn today's New York Times, Frances Robles provides new details of the extensive political giving of two wealthy Ecuadoran brothers, Roberto and William Isaias, who are wanted in their home country for allegedly looting a bank. From the Times:

"There is a certain mercenary aura on the Hill when it comes to overlap of fund-raising from wealthy individuals with problems," said Ken Boehm, chairman of the National Legal and Policy Center, a research group. "The key elements are all there: They are wealthy and have problems that are solved by the discretionary judgment of someone in the administration. They have tons of money and are willing to write checks all over the place."

Obama Lied; Our Health Plan Cancelled Today

Remember President Obama promising “If you like your plan, you can keep your plan?” PolitiFact.com has identified 37 instances of Obama or another top administration official making this claim, or something close to it.

Today we received this email from United HealthCare informing us that our health plan that we like "will no longer be offered:"

UnitedHealthcare email

Menendez Discloses Another Flight on Melgen's Jet; Will Investigations Go Anywhere?

Melgen Menendez photoSenator Robert Menendez (D-NJ) disclosed on Friday that he accepted a third flight on a jet owned by Dr. Salomon Melgen, his largest donor, who is apparently under investigation for Medicare fraud. Last year, when Menendez was forced to admit to that he accepted two flights from Melgen, his office asserted that there were no more flights. Menendez' failure to reimburse Melgen was characterized as an "oversight," the same term his office used in reference to the first two flights.

Probe of Senator Robert Menendez Expanding?

Menendez photoNew York TV station NBC 4 reported today that the federal criminal probe of New Jersey Senator Robert Menendez is expanding:

The Department of Justice is investigating Menendez's efforts on behalf of two fugitive bankers from Ecuador, multiple current and former U.S, officials tell NBC 4 New York. The probe into Menendez's dealing with the bankers comes as federal authorities are also investigating his relationship to a big campaign donor from Florida.

The donor is Salomon Melgen, Menendez' largest contributor. In 2012, Melgen contributed $700,000 to a super PAC affiliated with Senate Majority Leader Harry Reid (D-NV) that spent the bulk of the funds for Menendez' re-election. The report notes:

Dana Milbank's Hack Journalism

MilbankYesterday, I confronted outgoing General Motors CEO Dan Akerson, the speaker at a National Press Club luncheon. At a press conference beforehand, and through the first question at the conclusion of his remarks, I requested that GM repay taxpayers the $10 billion in direct GM bailout costs.

Akerson's refusal dominated much of the media coverage of the event. This was clearly not the story line that Akerson intended.  In short, we happily stepped all over his message that the bailout is a success and that GM is back.

Sorry Dan Akerson, GM Bailout is Failure

I made these remarks today at the National Press Club in Washington, DC before the luncheon speech of outgoing General Motors CEO Dan Akerson:

President Obama justified the auto bailout by predicting it would make money for the taxpayer. With Treasury now selling its remaining shares, the direct loss is about $10 billion. So on its most fundamental level, the auto bailout is a failure.

But that $10 billion figure dramatically understates the true cost. There were separate multibillion dollar bailouts of Ally Financial, formerly know as GMAC, and Delphi and other suppliers. There was cash for clunkers, the government guarantee of warrantees, accelerated fleet purchases, etc., etc.

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