Congress demands answers from GM's CEO

Faulty ignition switches linked to 13 traffic deaths — Why did GM wait so long to recall?
Associated Press
Apr 1, 2014

The fix for a faulty ignition switch linked to 13 traffic deaths would have cost just 57 cents, members of Congress said Tuesday as they demanded answers from General Motors' new CEO on why the automaker took 10 years to recall cars with the defect.

At a hearing on Capitol Hill before a House subcommittee, GM's Mary Barra acknowledged under often testy questioning that the company took too long to act. She promised changes at GM that would prevent such a lapse from happening again.

"If there's a safety issue, we're going to make the right change and accept that," said Barra, who became CEO in January and almost immediately found herself thrust into one of the biggest product safety crises Detroit has ever seen.

But as relatives of the crash victims looked on intently, she admitted that she didn't know why it took years for the safety defect to be announced. And she deflected many questions about what went wrong, saying an internal investigation is under way.

Since February, GM has recalled 2.6 million cars — mostly Chevrolet Cobalts and Saturn Ions — over the faulty switch, which can cause the engine to cut off and the vehicle to lose power steering and power brakes. The automaker said new switches should be available starting April 7.

Barra was firm but calm and polite throughout the proceedings. But she struggled at times to answer lawmakers' pointed questions, particularly about why GM used the switch when it knew the part didn't meet its own specifications.

When she tried to draw a distinction between parts that didn't meet specifications and those that were defective and dangerous, Rep. Joe Barton, R-Texas, shot back: "What you just answered is gobbledygook."

She also announced that GM has hired Kenneth Feinberg — who handled the fund for the victims of 9/11, the Boston Marathon bombing and the BP oil spill — to explore ways to compensate victims of accidents in the GM cars. Barra stopped short of saying GM would establish such a fund.

Some of the questioners appeared surprised that Barra hadn't reviewed the tens of thousands of pages of documents that GM had submitted to the committee, and that she was unaware of some decision-making processes at the company.

Rep. Diana DeGette, D-Colo., held up a switch for one of the cars and said a small spring inside it failed to provide enough force, causing car engines to turn off when they went over a bump.

DeGette showed how easy it was for a light set of keys to move the ignition out of the "run" position. That can cause the engine to stall and the driver to lose power steering and power brakes.

GM has said that in 2005 company engineers proposed solutions to the switch problem but that the automaker concluded that none represented "an acceptable business case."

"Documents provided by GM show that this unacceptable cost increase was only 57 cents," DeGette said.

Rep. Tim Murphy, R-Pa., chairman of the House Energy and Commerce Subcommittee on Oversight and Investigations, read from an e-mail exchange between GM employees and those at Delphi, which made the switch. One said that the Cobalt is "blowing up in their face in regards to the car turning off."

Murphy asked why, if the problem was so big, GM didn't replace all of them in cars already on the road.

"Clearly there were a lot of things happening" at that time, Barra said.

In his prepared remarks, David Friedman, head of the National Highway Traffic Safety Administration, pointed the finger at GM, saying the automaker had information last decade that could have led to a recall, but shared it only last month.

Rep. Henry Waxman, D-Calif., said that House Energy and Commerce Committee staff members found 133 warranty claims filed with GM over 10 years detailing customer complaints of sudden engine stalling when they drove over a bump or brushed keys with their knees.

The claims were filed between June 2003 and June 2012.

Waxman said that because GM didn't undertake a simple fix when it learned of the problem, "at least a dozen people have died in defective GM vehicles."

Some current GM car owners and relatives of those who died in crashes were also in Washington seeking answers. The group attended the hearing after holding a news conference demanding action against GM and stiffer legislation.

Owners can ask dealers for a loaner car while waiting for the replacement part. Barra said GM has provided more than 13,000 loaner vehicles.

Comments

sugar

Awww Government Motors is a disappointment.

GoBigLex2001

Why I will keep buying Fords. No foreign crap or GM or Crapsler.

The Answer Person

Why would GM send someone new on the payroles to try to answer the questions of the Congress? Makes ya wonder...

Pete

She's a GM lifer:

"She started working for General Motors at the age of 18 as a co-op student in 1980 and subsequently held a variety of engineering and administrative positions, including being manager of the Detroit/Hamtramck Assemblyplant."

From the Grave

2.6 million time .57 equals roughly 1.3 million dollars. That might the CEO's bonus money. There's your answer on why it has been ignored. Nobody at GM loses sleep over people dying.

phroggy

The bottom line is that it's a friggin ignition switch. I mean really, what was so hard about fixing the problem? Still, it doesn't change my opinion of GM. I'd still buy their vehicles.

sorryhog

Just goes to show you, just because you are a boss, doesn't mean you are bright.

AnyMajDude

To add to this mess, I'm guessing these switches are made in either Mexico or China. Which will make getting replacement parts for the recall more difficult and take longer!

SoldOnAcorns

The UAW will fix this and make it all go away :P

pntbutterandjelly

When the Feds sue and gets the money from an auto manufacturer (or whomever)...what becomes of the money? Just curious.

fotobug

Buy a Hyundai

kURTje

She can always blame the UAW.

downthemiddle

She sounds just like obama... " Based on what we knew at the time..."

She may as well walk across the hall and stonewall on Benghazi as well.

downthemiddle

Shouldn't she?

pntbutterandjelly

March 27, 2014 7:00AM ET

by Kaelyn Forde - @kaelynforde

Mary Jones takes pride in the neatly tucked corners of her bed and the spotless countertops of her kitchen in the small efficiency apartment she calls home in northern New Jersey. A little sign next to the front door reminds her: “Success starts with a single step!”

Born partially blind and with cerebral palsy, Jones savors the independence of living on her own with just weekly visits from an aide. So when she was offered work at a local Goodwill charity store in the fall of 2012, Jones said, she looked forward to the independence of a job. But the reality was much different.

“They had me downstairs in their store, trying to hang clothes up on the hangers,” Jones said. “And to make a dollar, I had to hang a hundred pieces. If I was lucky, I made 50 cents. It was a penny per item of clothing. I felt worthless. I just didn’t want to go. They made me feel bad because I couldn’t work fast enough.” Jones is not using her real name out of a fear of retribution.

Jones’ pay stubs, which she shared, show the subminimum wages she was paid by Goodwill Industries of Greater New York and Northern New Jersey Inc. Between September 2012 and January 2013, she made as little as $3.27 for 24.88 hours of work. The biggest check she received was $18.18 for 35.87 hours of work. She paid state taxes, as well as Social Security and Medicare deductions, on her wages.

But the subminimum wage Jones was paid is legal, thanks to section 14C of the U.S. Fair Labor Standards Act. Passed in 1938 and known as the Special Minimum Wage Certificate, the law allows more than 3,300 employers nationwide to pay people with disabilities below federal minimum wage.

Goodwill Industries said less than 7 percent of its workforce — about 7,500 employees — is paid this way nationwide. Goodwill has defended its use of the Special Minimum Wage Certificate, saying, “Eliminating this program would harm, not help, people with significant and multiple disabilities.”

Goodwill declined to be interviewed for this article, but previously, company spokesman Brad Turner-Little has told Al Jazeera: “We at Goodwill believe work is an important part of the human experience and the human spirit, and the certificate allows us to incorporate people into our workforce that we otherwise wouldn’t necessarily be able to without the certificate.”

Goodwill Industries of Greater New York and Northern New Jersey Inc. reported assets of $38 million in 2012. Tax returns show its CEO earned $467,000 in compensation.

“The subminimum wage Jones was paid is legal, thanks to section 14C of the U.S. Fair Labor Standards Act. Passed in 1938 and known as the Special Minimum Wage Certificate, the law allows more than 3,300 employers nationwide to pay people with disabilities below federal minimum wage.”

More than 170,000 people have signed a petition asking Goodwill to pay all of its workers at least the federal minimum wage. Arthur Jacobs of the National Federation of the Blind helped deliver the petition to Goodwill’s offices in New York City late last year. “When you hear ‘subminimum wage,’ you think that only happens in China, and other places that don’t have the kind of regulations that the United States has,” said Jacobs. “But we have found that there are people who are making as little as 3 cents an hour. It’s crazy. They say the wages are performance-based, but the way that they evaluate that performance is very arbitrary.”

In February, disabilities rights groups succeeded in pressuring the White House to include federal contractors with disabilities who had been earning less under the Special Minimum Wage Certificate in the new $10.10 per hour federal contractor minimum wage.

Ari Ne’eman, president of the Autistic Self Advocacy Network, estimated that between 7,000 and 15,000 federal contractors had been paid subminimum wages. He said the White House’s decision has set an important precedent.

“In addition to directly impacting thousands of federal contract workers, it places the issue of minimum wage for disabled workers squarely at the center of the minimum wage conversation for the first time,” he said.

“We are now really putting those in the private sector who are defending subminimum wages in the public eye, and making the public see them as we in the advocacy community have seen them all along — as employers defending worker exploitation,” Ne’eman said.

For Jacobs, who is blind, and other workers with disabilities, it is also about shattering stereotypes.

“The biggest thing that I encounter in finding a job is that it’s not my disability that stands in my way,” said Jacobs. “It’s really more the attitudes of the people I encounter and their ideas about what I am able or am not able to do that stand in my way.

{And the rich get richer at the expense of everyone else.}

cover ups
statutory loop holes
tax evasion
off-shore tax havens
store bought legislation
N.S.A. spying
Corporate subsidies
income stratification
health care for only the wealthy
economic slavery
no limits on campaign contributions

* I smell a corporate coup. But don't you worry...New World Order, hosted by the G.O.P., is coming your way!

pntbutterandjelly

April 1, 2014 10:00PM ET

by Lisa De Bode - @lisadebode

Nine out of 10 fast-food workers said they are the victims of wage theft, according to a nationwide poll released on Tuesday. The results come on the heels of a series of labor lawsuits and protests that put the industry under an uncomfortable spotlight and revealed widespread labor abuses in restaurants.

The advocacy group Low Pay Is Not OK commissioned the poll. The group also highlighted the experiences of two former McDonald's managers who spoke about how they were pressured to boost profits by manipulating numbers in a central computer system keeping track of workers' pay. The managers said they inserted unpaid breaks in workers’ schedules, shaved hours from shifts and moved hours from one week to the next to avoid paying workers overtime.

Kwanza Brooks, a former manager at McDonald’s restaurants in North Carolina and Maryland who is now an advocate with Low Pay Is Not OK, told Al Jazeera withholding pay from employees was an “unofficial policy” to keep labor expenses low and hit targets.

“It’s like running a competition, so to speak, an incentive,” said Brooks. “If you keep labor down, what it does is that it gives the account managers a bonus. That’s what their real target was.” Asterisks next to the names of employees who worked overtime helped store managers keep track of expensive outliers and, in the industry’s euphemism, “balance labor.”

The survey poll of 1,088 fast-food workers in 10 major cities across the United States also found:

— 92 percent of Burger King workers, 84 percent of McDonald’s workers and 82 percent of Wendy’s workers are victims of wage theft;

— 60 percent of fast-food workers have experienced three or more different types of wage theft;

— 60 percent of fast-food workers have been required to perform tasks before clocking in or after clocking out;

— 26 percent of fast-food workers have not always been paid time and a half for overtime hours they worked.

In addition, 4 in 5 workers describe their conditions as “just fair or poor,” and 1 in 4 women report being discriminated against because of gender.

Olga Garcia, a mother of three who has worked at McDonald’s in Oakland, Calif., for 14 years, said she could barely survive on what she makes, “and that’s before they start chiseling money from my check.”

“This poll shows that I am not alone and that fast-food companies are boosting their profits by stealing from just about every one of us workers. That’s why we are all joining together to form a union because together we can fight to end these illegal practices,” she said in a statement.

Brooks, a 37-year-old single mother of three children, said she worked at McDonald’s for 12 years, until one day she “just became tired of it.” Familiar with the challenges workers such as Garcia face, she quit to protest the unfairness she said was inflicted on her workers whose complaints were ignored.

“It makes you feel bad. It’s hard enough as it is,” she said. “You’re working to just pay your bills, but it’s even harder if you have a company that’s more concerned about keeping money for itself ... They don’t care that you have kids, they don’t care that you are a parent and need to spend time with your kids.”

McDonald’s said in an online statement that it would be investigating the allegations.

“McDonald’s and our independent owner-operators share a concern and commitment to the well-being and fair treatment of all people who work in McDonald’s restaurants,” said Heidi Barker Sa Shekhem, a company spokeswoman. “McDonald’s and our independent owner-operators are each committed to undertaking a comprehensive investigation of the allegations and will take any necessary actions as they apply to our respective organizations.”

The fair-pay movement is gaining momentum following the settlement of two labor lawsuits against fast-food companies in New York, where a 2012 survey found 84 percent of fast-food employees reported wage theft.

A McDonald’s franchise owner in March settled a lawsuit in the amount of $500,000 for unpaid laundry allowances, uncompensated work time and unlawful wage deductions. The company also faces class-action lawsuits in Michigan and California for alleged wage theft. The owners of 23 Domino’s restaurants agreed to pay nearly half a million dollars in a similar case last week.

In November, hundreds of workers walked off their jobs in strikes across the country, demanding their wages be raised from the minimum $7.25 to $15.

pntbutterandjelly

April 2, 2014 10:56AM ET |Updated 1:38PM ET

The U.S. Supreme Court has struck down a key pillar of campaign finance law and expanded how much political donors can give candidates, in a move critics said would hand further power to special interests and the "super rich."

In a landmark 5–4 vote Wednesday, the court voided the overall limits under federal law limiting the total that individuals can give to candidates, parties and political action committees during the federal two-year election cycle.

The ruling means that Americans have a right to give the legal maximum to candidates for Congress and president, as well as to parties and PACs, without worrying that they will violate the law when they bump up against a limit on all contributions, set at $123,200 for 2013 and 2014. That includes a separate $48,600 cap on contributions to candidates.

But their decision does not undermine limits on individual contributions to candidates for president or Congress, now $2,600 an election. The ruling also leaves in place laws that require candidates, parties and political action committees to disclose information about donors.

Nonetheless, the decision was quickly attacked government transparency advocacates.

"Once again, the Supreme Court has given more power to special interests and a tiny percentage of the very rich," The Sunlight Foundation said in a statement.

The court was divided over how sweeping the ruling actually is. The biggest impact is that a single donor can now give the maximum amount by law to as many federal candidates, parties and committees as he or she wishes.

The 5–4 split was along party lines, with the five justices appointed by Republican presidents joining the majority and the four appointed by Democratic presidents dissenting.

"I am concerned that today's ruling may represent the latest step in an effort by a majority of the Court to dismantle entirely the longstanding structure of campaign finance law erected to limit the undue influence of special interests on American politics," said Sen. John McCain, R-Ariz., in a statement released following the decision.

McCain said there would be "scandals involving corrupt public officials and unlimited, anonymous campaign contributions" that would force another reform in the future.

Chief Justice John Roberts, writing on behalf of the court, said the justices did not reach the question of whether to overturn a key 1976 ruling, Buckley v. Valeo, which upheld limits on campaign finance donations while also describing how courts should analyze such regulations.

Justice Clarence Thomas, who voted with Roberts, said the court had gone further than the chief justice claimed. Roberts said in his opinion that the aggregate limits violated the First Amendment of the U.S. Constitution, which protects free speech.

But not everyone saw it that way.

"What this court fails to recognize is the First Amendment rights of the 99.9% of citizens who cannot buy access to elected officials in order to give voice to their issues," the Sunlight Foundation said. "Seven-figure contributions are not a megaphone merely amplifying the voices of the donors, they are a sonic boom, overpowering to the point of silencing all other voices."

He rejected the contention of President Barack Obama's administration that the limits are needed to fight corruption. The caps "do little, if anything, to address that concern, while seriously restricting participation in the democratic process," wrote Roberts, appointed by former President George W. Bush.

The decision comes four years after the court's landmark Citizens United v. Federal Election Commission ruling, which cleared the way for increased independent corporate and union spending during federal elections.

In a dissenting opinion, Justice Stephen Breyer said the ruling, along with Citizens United, "eviscerates our nation's campaign finance laws." Wednesday's ruling could threaten the legal architecture that underpins other campaign finance regulations.

The aggregate limits have been in place, in various forms, since 1974, with the most recent version dating back to the 2002 Bipartisan Campaign Reform Act.

Republican donor Shaun McCutcheon, an Alabama businessman, and the Republican National Committee had challenged the contribution caps. Before Wednesday's Supreme Court decision, donors could not exceed the $123,200 overall limit during the two-year period. The case is McCutcheon v. Federal Election Commission, U.S. Supreme Court, 12-536.

1

pntbutterandjelly

April 2, 2014 10:56AM ET |Updated 1:38PM ET

The U.S. Supreme Court has struck down a key pillar of campaign finance law and expanded how much political donors can give candidates, in a move critics said would hand further power to special interests and the "super rich."

In a landmark 5–4 vote Wednesday, the court voided the overall limits under federal law limiting the total that individuals can give to candidates, parties and political action committees during the federal two-year election cycle.

The ruling means that Americans have a right to give the legal maximum to candidates for Congress and president, as well as to parties and PACs, without worrying that they will violate the law when they bump up against a limit on all contributions, set at $123,200 for 2013 and 2014. That includes a separate $48,600 cap on contributions to candidates.

But their decision does not undermine limits on individual contributions to candidates for president or Congress, now $2,600 an election. The ruling also leaves in place laws that require candidates, parties and political action committees to disclose information about donors.

Nonetheless, the decision was quickly attacked government transparency advocacates.

"Once again, the Supreme Court has given more power to special interests and a tiny percentage of the very rich," The Sunlight Foundation said in a statement.

The court was divided over how sweeping the ruling actually is. The biggest impact is that a single donor can now give the maximum amount by law to as many federal candidates, parties and committees as he or she wishes.

The 5–4 split was along party lines, with the five justices appointed by Republican presidents joining the majority and the four appointed by Democratic presidents dissenting.

"I am concerned that today's ruling may represent the latest step in an effort by a majority of the Court to dismantle entirely the longstanding structure of campaign finance law erected to limit the undue influence of special interests on American politics," said Sen. John McCain, R-Ariz., in a statement released following the decision.

McCain said there would be "scandals involving corrupt public officials and unlimited, anonymous campaign contributions" that would force another reform in the future.

Chief Justice John Roberts, writing on behalf of the court, said the justices did not reach the question of whether to overturn a key 1976 ruling, Buckley v. Valeo, which upheld limits on campaign finance donations while also describing how courts should analyze such regulations.

Justice Clarence Thomas, who voted with Roberts, said the court had gone further than the chief justice claimed. Roberts said in his opinion that the aggregate limits violated the First Amendment of the U.S. Constitution, which protects free speech.

But not everyone saw it that way.

"What this court fails to recognize is the First Amendment rights of the 99.9% of citizens who cannot buy access to elected officials in order to give voice to their issues," the Sunlight Foundation said. "Seven-figure contributions are not a megaphone merely amplifying the voices of the donors, they are a sonic boom, overpowering to the point of silencing all other voices."

He rejected the contention of President Barack Obama's administration that the limits are needed to fight corruption. The caps "do little, if anything, to address that concern, while seriously restricting participation in the democratic process," wrote Roberts, appointed by former President George W. Bush.

The decision comes four years after the court's landmark Citizens United v. Federal Election Commission ruling, which cleared the way for increased independent corporate and union spending during federal elections.

In a dissenting opinion, Justice Stephen Breyer said the ruling, along with Citizens United, "eviscerates our nation's campaign finance laws." Wednesday's ruling could threaten the legal architecture that underpins other campaign finance regulations.

The aggregate limits have been in place, in various forms, since 1974, with the most recent version dating back to the 2002 Bipartisan Campaign Reform Act.

Republican donor Shaun McCutcheon, an Alabama businessman, and the Republican National Committee had challenged the contribution caps. Before Wednesday's Supreme Court decision, donors could not exceed the $123,200 overall limit during the two-year period. The case is McCutcheon v. Federal Election Commission, U.S. Supreme Court, 12-536.

JERRY from SANDUSKY

Check out the nose holes