GM CEO says she’s been interviewed in ignition switch probe
DETROIT (AP) — General Motors CEO Mary Barra confirmed Tuesday that she has been interviewed by the Justice Department in its criminal probe of how the company handled a deadly ignition switch problem in older small cars.
Barra told reporters the interview happened last year but said she didn’t know when the U.S. attorney’s office in Manhattan would release the results of its probe.
“We have cooperated fully. We continue to do that,” she said. “It is their timeline,” she said about when charges could be filed.
Wire fraud likely is among the statutes being considered by federal investigators because GM used electronic communications to interact with the government’s National Highway Traffic Safety Administration. Investigators are focused on whether GM failed to notify the agency of the switch problems and potentially tried to hide them. Automakers must notify NHTSA within five days of finding out about a safety defect.
The switches in cars such as the Chevrolet Cobalt and Saturn Ion can slip out of the run position, shutting off the engine and disabling power steering, power brakes and air bags. The problem has caused at least 111 deaths and hundreds of injuries. GM has acknowledged knowing about the problem for more than a decade, yet it didn’t recall the 2.6 million cars until last year.
Last year the same U.S. Attorney’s office forced Toyota to pay a $1.2 billion civil penalty for delays and cover-ups in unintended acceleration cases. Toyota settled the case but acknowledged hiding information about defects. The department also filed a wire fraud charge against Toyota that will be dismissed in 2017 if the company complies with the terms of the settlement.
Also Tuesday, Barra said GM doesn’t need to merge with Fiat Chrysler to take advantage of its size to save money on building cars and trucks.
She told reporters Tuesday before the company’s annual meeting that Fiat Chrysler CEO Sergio Marchionne emailed her about merging, but the proposal was dismissed by the GM senior management and board.
GM, she said, is working with Ford on transmissions and Honda on hydrogen fuel cells and will look at opportunities with other automakers. But she says GM expects to sell 10 million vehicles this year, and is big enough to use its own size and scale to save money.
Marchionne has been pushing for consolidation of automakers, saying the industry wastes capital developing engines, transmissions and other parts that buyers don’t care about. But he says no companies have agreed to merger talks.
But Barra said GM can save costs by working its own plan and bring value to shareholders.
“Over the past few years we have been merging with ourselves,” she told reporters. “We already have scale.”
She disagreed with Marchionne that customers don’t care about engines, saying that GM has received feedback from many customers on engines in the 2016 Camaro. The company plans to offer a turbocharged four-cylinder engine as the standard powerplant in the new Camaro due out later this year.
Citi Analyst Itay Michaeli, in a recent note to investors, cautioned that previous auto industry mergers have been “fraught with cultural and product complexities that often yielded mixed results at best.”
Michaeli agreed with Barra that GM can save money on its own. “We certainly wouldn’t frown upon consolidation attempts, but in GM’s particular case we see plenty of opportunity for internal consolidation to achieve greater scale and purchasing synergies, at least over the next 1-2 years,” he wrote.
The company also announced that 2016 model Cadillacs will have Apple CarPlay and Google’s Android Auto to integrate smart phones into the cars’ dashboard systems. The company announced last month that the systems would be in many in many future Chevrolet models.
The headline on this story has been corrected to reflect that the investigation is tied to the ignition-switch recall, not the air-bag recalls.