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GM emails show more unheeded warnings about ignition defects

By Ben Klayman and Eric Beech

WASHINGTON (Reuters) - U.S. lawmakers on Wednesday accused General Motors Co of a "disturbing pattern" of neglecting safety and revealed emails from 2005 in which a GM employee warned a "big recall" may be necessary over an ignition-switch problem that was only addressed this week.

GM Chief Executive Mary Barra faced tough questions about widespread safety failures at GM in her third public appearance before Congress since the automaker started recalling millions of vehicles in February.

The No. 1 U.S. automaker has issued 44 recalls this year, including one for an ignition flaw linked to at least 13 deaths over the past decade. It has recalled 20 million vehicles, mostly in the United States, of which nearly 6.5 million were recalled for ignition switch-related issues.

In the emails made public on Wednesday, GM employee Laura Andres in 2005 sent one to engineers warning that a 2006 Chevy Impala Special car she was driving had experienced an engine stall when moving between a paved road and gravel.

She said a technician had advised the problem may be with part of the ignition switch.

"I think this is a serious safety problem, especially if this switch is on multiple programs. I'm thinking big recall," Andres said in an email sent to 11 other GM employees including the vice president of North American engineering.

Andres declined to comment on Wednesday.

The 2006 Impala was not recalled until Monday of this week, as part of an additional 3 million cars that GM recalled for an ignition-switch issue.

GM in February and March recalled 2.6 million cars, including the Chevrolet Cobalt, for a separate ignition switch issue in which the car could unexpectedly stall, disabling air bags, power steering and power brakes.

A GM investigation found the automaker had ignored warnings about the deadly defect for more than a decade.

"This latest recall appears to follow the same disturbing pattern as the Cobalt breakdown," House Energy and Commerce Chairman Fred Upton said about the email exchange he revealed on Wednesday.

When asked by reporters about the emails after the hearing, Barra said, "I think the important thing is, as it relates to stalls, we consider stalls to be a safety issue. And if it is because of a defect, we're going to take action."

'FRANKLY ALARMING'

Barra appeared alongside Anton Valukas, the GM-hired investigator who delivered a report earlier this month about the recall scandal that spared top executives and pinned blame on lower-level engineers and lawyers.

The report said those employees either did not appreciate the danger of the flaw or did not share the risk with their superiors.

Barra, who became CEO only in January but is a GM veteran of more than 30 years, has said she did not become aware of the problem until December 2013 and was not fully briefed until January of this year.

"That the most senior GM executives may not have known about a defect that caused more than a dozen deaths is frankly alarming and does not absolve them of responsibility for this tragedy," said Democratic Representative Diana DeGette of Colorado.

The company has pushed out 15 employees since the recalls were announced, including some high-ranking officials, but the departures have not affected the top level of executives.

The most senior executive on the Andres email chain about the Impala was Ed Koerner, who was named vice president of North American engineering in spring 2005, before Andres sent her first email. He retired in 2009. He could not immediately be reached for comment.

Another familiar name on the Andres email chain was former GM engineer Ray DeGiorgio, one of the 15 employees pushed out. The former company engineer initially approved an ignition switch design for the Cobalt that did not meet company specifications. He later approved a redesign without changing the part number, an unheard-of move in the industry.

EXHAUSTIVE REVIEW

Lawmakers also said they are concerned that the number of recalls connected to ignition-switch issues continues to grow.

GM's recalls this year include one last Friday for more than half a million Chevrolet Camaros for an ignition-switch issue that is not related to the earlier recall of Cobalts and other small cars.

GM is taking recall-related charges of $2 billion so far this year. GM has not tied any fatalities to the more recent ignition-related recalls.

"We are currently conducting what I believe is the most exhaustive, comprehensive safety review in the history of the company," Barra said on Wednesday.

CHRYSLER PROBES

But lawmakers pounced on the mounting recalls as potential evidence of bigger safety problems at GM.

Republican Representative Tim Murphy of Pennsylvania, chairman of the oversight subcommittee holding the hearing, said the latest ignition-related recalls are "hauntingly similar" to the prior recalls connected to more than 13 deaths.

Separately on Wednesday, U.S. safety regulators said they have opened two investigations into Chrysler Group vehicles involving possibly faulty ignition switches that can be bumped out of the "run" position, disabling air bags in the event of a crash.

The issue is similar to the GM recalls. No deaths or injuries are linked to the ignition-switch issue suspected in about 1.25 million vehicles covering five Chrysler models involved in the new investigations by the National Highway Traffic Safety Administration, the agency said. Chrysler is a unit of Fiat Chrysler Automobiles .

COMPENSATION FUND

Barra said in her testimony on Wednesday that GM is addressing any and all safety concerns. She also said the company is committed to change.

"I want this terrible experience permanently etched in our collective memories. This is a tragic problem that never should have happened. And it must never happen again."

Barra also said a compensation fund that GM is creating will cover all victims who suffered a serious physical injury, as well as families of victims who died. She said there will not be a cap on the fund.

Democratic Senator Richard Blumenthal of Connecticut, an outspoken critic of GM's response to the ignition issues, on Wednesday morning gathered with victims' families and called on GM to fully compensate those impacted.

"All the consequences should be compensated and they should be done without the need for elaborate standards of proof or reconstruction of accidents," he said.

GM and Barra have so far weathered the scandal with few signs of permanent damage. The automaker's May U.S. sales were up 12.6 percent from the prior year, well above analyst expectations, and its share price is slightly stronger than just before the announcement of the first ignition-related recall on Feb. 13.

Also, GM on Wednesday received more awards for initial quality from J.D. Power than any other automaker in the U.S. market.

(Additional reporting by Annika McGinnis in Washington; Writing by Karey Van Hall; editing by Matthew Lewis)

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