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Friday, October 31, 2014
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Published: Tuesday, 7/22/2014

EDITORIAL

GM’s rebuke

Company’s legal department played role in concealing the problem from the public.

A CONSISTENT theme in the emerging revelations about General Motors’ deadly ignition switch has been the central role the company’s legal department played in concealing the problem from the public, government safety regulators, and purchasers for more than a decade.

At a hearing last week of a Senate subcommittee on consumer protection, Claire McCaskill of Missouri, its Democratic chairman, rightly expressed dismay that GM’s top lawyer, Michael Millikin, still has his job after leading a legal team that fought lawsuits despite knowing of the safety danger.

Ms. McCaskill derided what she called a “culture of lawyering up” that had “killed innocent customers.” She noted that Mr. Millikin had been warned of potential liability for punitive damages related to the faulty switch. She attributed his claim to be unaware of the problem until February to “either gross negligence or gross incompetence.”

Ms. Barra has taken positive steps to address the company’s safety crisis — approving huge recalls and agreeing to hand out millions of dollars through a victims’ compensation fund, designed and administered by a respected compensation specialist, Kenneth Feinberg. But retaining Mr. Millikin hardly inspires confidence in Ms. Barra’s commitment to transform GM’s internal culture by increasing transparency, accountability, and attention to safety.

Nor do other troubling issues that came up during the senators’ questioning. These include GM’s refusal to waive its protection under bankruptcy to allow suits by aggrieved victims who would prefer to seek justice in court.

They include the company’s refusal to waive the secrecy of legal settlements that are conditioned on the silence of the victims’ families about the switch. And they include its refusal to make available interviews and other material gathered in the course of producing an internal report that criticized systemic failures but exonerated higher-ups.

A Justice Department investigation is continuing, and Congress is not finished. But it is clear that new laws to deter such cover-ups and increasing accountability are badly needed.

Three measures that Sen. Richard Blumenthal (D., Conn.) has introduced are a promising start. The bills would prohibit secret settlements that hide safety defects, impose a specific duty on companies to report significant consumer safety problems promptly at the risk of heavier fines than now exist, and extend whistle-blower protection to employees who reveal dangerous product safety flaws.

— New York Times



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