GM Could Face Prosecution As Senators Accuse Company Of Cover-up

GM Could Face Prosecution As Senators Accuse Company Of Cover-up

General Motors Company (NYSE:GM) could face prosecution related to the on-going investigation against the automaker regarding its failure to fix the faulty ignition switch in its vehicles, particularly Chevrelot Cobalts and Saturn Ions for years.

The members of the Senate subcommittee investigating the issue accused General Motors Company (NYSE:GM) of trying to cover up the problems linked to its vehicles’ ignition switch. The lawmakers also urged the automaker’s CEO to punish those involved.

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GM had a culture of cover-up

Senator Claire McCaskill said the automaker had a “culture of cover-up” noting that one of its employees lied under oath regarding the issue. According to her, GM Engineer Ray DeGiogio lied when he testified in a court case that he does not have any knowledge about the company quietly changing the defective switch in 2006 but not replacing the part number. However, a document was presented showing that DeGiorgio signed off on it.

Sen. McCaskill pointed out that the automaker had a problem of having “a culture that allowed an engineer at GM to repeatedly lie under oath.” The lawmaker added the General Motors Company (NYSE:GM) had “a corporate culture that chose to conceal rather than disclose.”

GM has real exposure to criminal liability

The Department of Justice is currently conducting a criminal investigation to find out how General Motors Company (NYSE:GM) implemented its recall.

Senator Richard Blumenthal is convinced that the automaker “has a real exposure to criminal liability” and investigators from the Justice Department will use intense scrutiny regarding the issue. He added that General Motors Company (NYSE:GM) will likely face prosecution based on the details he is seeing and hearing about the problem.

Some of the members of the Senate subcommittee believed that a person or a group within the company intentionally did not change the part number when they replaced the defective switch. The lawmakers suggested that the action represents a criminal violation. Barra acknowledged that the action is unacceptable. Sen. Kelly Ayotte said, “I don’t see this as anything but criminal.”

When asked how many times General Motors Company (NYSE:GM) had been sued in connection with the defective ignition switches and how many cases were settled with secrecy provisions, Barra said she has no knowledge about it because she is focused on getting parts to customers. According to her most of the details the Congress wants to know about the problem will come out in GM’s internal investigation, which will be completed in 45 to 60 days. Barra emphasized that the company is currently focused on the consumers and safety.

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