everyone would say of recruiting class turned out to be pretty darned good. the primary process like any primary process is always bumpy but starting back in september and continuing today we have invested hundreds of thousands of dollars in training and travel and time to make sure our candidates, we don't tell them what to believe but just making sure they talk in a way that's relevant to voters. so a real quick overview of the senate. history. presidents lose 6.6 seats on average going back to the 50s in their second midterm elections. obviously 6 feet except the majority. democrats have also had a geography problem. we have had 14 incumbents up for re-election and 13 are in states that romney won. one is in a state that obama won

and that susan collins. of the seven contested democratic seats six of those obama got 42% or less won all seven of them. the democrats have a historical problem in a geographical problem. this election is going to be allow president obama. two factors that factor into that. one come in midterm elections are about the current state of the country. going back to any midterm election in particular as i said historically speaking a midterm election of a second term president but also with harry reid essentially shutting down the senate, you don't have a lot of senators who have passed legislation. mark begich has never had an amendment or a roll call vote on the senate floor. i want to say kay hagan has only 15 bills that she sponsored and cosponsored after signing the law. the sportsman's package last week was one of her first

national initiatives. these candidates have fewer and fewer things to run on. they have to run on big national priorities like obamacare so how is the president doing? people remain pessimistic about the track of the country. approval continues to be in the wrong direction. double digits in the wrong direction for obama. you can see independent voters decidedly oppose this president. when a president gets a cold nationally he gets pneumonia in the states that we care about. how does he look historically? to conceal bomb is trailing one past president and you can see historical trends. unlikely we see obama get up to them the mid-45 or 60s but we

can make a legitimate case. what is dominating? economy jobs deficit obamacare is still in the mix. you can see the track heading back towards march has been fairly stable. .. >> as we said, our party is

tied, but if you look at interest, seven to nine, six to seven, zero f. five, if you are 89 we have a significant lead that trickles down. it and what you are seeing is if there is support or opposition. here is what we are seeing. the president is that a significantly higher amount of people. and when you overlay intensity, here is what you see. they want to send a signal. there seems to be an enthusiasm gap among democrats. i know i am ripping through this . and just something that we track that we are very focused on, state-wide races, you have seen

us tighten it up. we have seen it move our way since june and july. the border crisis and other factors driving the national narrative. but we have a problem. the problem is that democrats have a lot more money, so we fight that every day. this is the environment that we are in. the democrats to a great job of talking about the help that we get and the money we spend. important to put any contextual context and understand how one where they are spending. they talk a great game. let's see where their money is. colorado, michigan. six months to a year ago, it $10 million in colorado and michigan. we see north carolina, where the

priorities are. you know, this is a cycle where the democratic allies in the senate are extremely active and well funded. when you have the president and majority leader of the u.s. senate going to fund-raisers and sitting down with major donors -- the new york times yesterday, the very wealthy man from san francisco in the white house in may. it tells you they are focused on raising money. nrc, we have not put down everything. obviously we have a different strategy, and our math has changed so much when you look where we are. scott brown dec. 301st. you will see more of that.

we always talk about we have 12 races that are tied or in the margin. these -- a quick run through the. a bunch of slides that we will not go through. but eight polls in a row. yes, some of them are republicans and some are not, but that is an important factor. there is the spring time lag. if but we are up in that race and will stay up. she won the primary, that is important to gives you will see the same thing in new hampshire. a bit of a gap. that will tighten up. i think that is significant in that we have been involved

heavily. a tremendous fund-raising quarter. public polling, that is a big gap obviously. north carolina, another state where we have been -- the outside groups outspent her heavily last year but have done a great job catching up. it clearly in charge. and we will run through states. for the sake of time. i would like to turn it over to one of the most important people at the nrc. iowa, arkansas, michigan, new hampshire, alaska, mexico, minn. to by his strong governor candidates will help pull us up and create a unified ticket. feeling good about their governor candid it's. one of the people i think will help us take back the senate, i

love it. >> thank you. it really has been a great team effort between and among all of the committee's command it will continue. obviously a big year for governors, 36 governor races defending 22 of the 36, including 19 incumbents. we are in a strong financial position as a committee. we continue to out raise 2-1. after spending 25 million we have 70 million on hand and are in position to spend a hundred million. a very strong position financially, and as you will see from the map year, we are also strong in our political position . thirty-six governors races, 19 incumbents. eighteen of the 19 are either tied or currently leading throughout the country.

we have spent 25 million the first half of the year. the goal was to narrow sense we are defending so much territory. you look at three states, iowa, south carolina, new mexico where we have sent -- spend money. about one to 2 million. we have taken those races from single digits to help the double-digit leads. it has allowed us to play a little more offense. there were three states that, frankly, were not competitive at the beginning of this year that within the last month are now competitive. leading by one point. you look at massachusetts, the poll for this week as baker down five. locked in an expensive primary. and hawaii, a state where we

will have a 3-way race. governor abercrombie has had one of the most disastrous implementations of the health care exchange of any governor in the country. and currently anywhere between six and eight points. there are nine states that would describe as the most competitive six states. not surprisingly a lot of canaille battleground states. pennsylvania, florida, maine. and three, what i would describe as tremendous pick up opportunities. you just break down the six. florida and ohio have been two of the biggest turnaround of any incumbent governor in the country. florida four months ago rick scott trailed by 15 points on

the ballot. he spent over $17 million. an ohio the governor's job approval was in the late 30's. today it is in the high 50's. he leaves by eight to ten points . in michigan and wisconsin we are in a strong position. states that public-sector unions care about him. these are going to be competitive states. again, to states that we are in a strong position to win our two most challenging, pennsylvania and maine, states were governors have great records. there will be challenging races, territories for republicans, but i can tell you, the argy a is

fully committed. and three pickup opportunities i mentioned. it has been a tremendous turnaround. obviously a very important competitive senate race. now, conn., that raises tied. a repeat of five years ago. lost by 6400 votes four years ago. that will be a highly competitive race in connecticut. in illinois the public-sector unions did their best. they spent about $6 million before the primary trying to knock him out. he won.

he currently leads by 12 points. an astounding 17%. a very strong wrong direction sentiment in the state and the great tradition of the illinois governor's. spending public money to support his campaign in 2010. and so i think we have a great shot in all three of those states. i am optimistic for some of the reasons folks have already mentioned for four specific reasons. first, a strong position financially. we have the ability is spend a hundred million dollars. the political environment is good and getting better. we have a capacity advantage without question.

looking at the senate, we have 25 senate races on like 2012 where governors were dismissing themselves. we have a great crop of u.s. senate candidates, a great crop of gubernatorial candid it's reinforcing one another. there are four states where our candidates for governor are running at relatively significantly ahead of our candidates for u.s. senate where i think they will be a help, iowa, michigan, georgia, and south carolina. four states that we will continue to engage in. the last and most importantly is the fact that governors are getting results and states are moving in the right direction, turning deficits and surpluses, reforming education, pensions, tax and regulatory regimes.

most important made job creation is job number one. voters are giving them credit for reforms made in improving conditions in their states. despite having to defend the 22-36 races, again, we have 18 of the 19 incoming and governors who are currently tied or leading and are in a strong position to maintain a majority. >> and i you want to say a couple of things before we do questions. >> absolutely. >> i am the president of the republican save leader committee. we have the fortune of being in all 50 states. we are underneath all of the races you see here today and are fortunate to have the operational capacity and execution of each of these committees as well as the lead from the rnc. it is the kind of thing that we

see and feel on a day-to-day basis. thank you for the leaders command we commend you on it. that is fortunate because we are, as i say, spread across 50 states. each of the three branches of government. we are close to the ground and are able to hear a lot of the feedback that is out there and understand what the localized conditions are. because of that execution and leadership will we are seeing is a tremendous opportunity based upon all of the factors that my colleagues discussed. and just to give you a finer point, we will start our legislative national meeting beginning tomorrow. the 93 leaders from all 50 states, the largest collection of state-level legislative leaders ever in history, and we have an opportunity not only to exceed our all-time highs in the legislative chambers, but to get a super majority across the

country. think about that. a supermajority of majorities and legislative chambers across the country. that is achievable and right around the corner. and we want to do that in a way that not only makes them leaders now, makes them effective, helps the governors and the other federal offices out there, but to put them on the escalator to higher office and make sure that we are putting our best foot forward. we have over 750 new female candidates and candid it's so diverse ethnicity, and they're able to interface with their constituents and voters through new medium's that the rnc is taking the leadership on the data friend and partner in with our friends. and so there is great opportunity right now to have those folks kate into office and make a tangible difference. but if you look at the maps of congress and the u.s. senate

right now, more than half of those officials have served. and each of our races, not only do we want to make sure we are getting the best possible panel to execute at the state level, but folks who create a terrific team of terrific team for these other offices down the line. we are looking to recruit the next governors, congress members , senators, presidents and make sure that those are the right candid it's. and each one of those representatives in congress right now are either republican that we have helped move through the leadership escalation to higher office or a democrat that we could have spent a lot less money in defeating at the state level. that is our goal, build the team and wipe out the next generation of democrats. i will do you all the courtesy of not going through the 7,500 races we have in front of us this year. happy to talk about it afterwards. we get granular real quick.

>> questions. raise your hand. [inaudible question] >> very similar to the one that president bush had, or do you think you are different in some way? >> a comparison of those, but i think you saw from historic data polling that they are kind of in a similar neighborhood. that could, you know -- historical trends are powerful. some folks say they don't count as much. they do. so you look going back -- well, since 1906 that president --

they lost on average just over six seats. i think that this president's, his popularity -- you will hear talk of legacy brands and the legislation. so they are forced to legislative agendas that are unpopular newhall and to a president that has directed their political career [inaudible question] >> disappointed in president obama. and even worse view of congressional republicans , which is true in many of the state's. what do persuade the voters do if that is there choice? >> send a message to the president. we are winning that on go votes right now command a think it is important that we have a positive agenda that highlights

the confidence of this administration and offers an alternative. and i think every campaign is in the process of developing that thought, but, you know, this election will be driven by where things are. people are smarter. presidential elections are about the future. so the president is going to be driving this election candidates really have to present a credible alternative as a candidate and have to have the resources, not to and spend the democrats because we won't do that, but have enough money to get out an alternative message that says there is an alternative direction to go here. [inaudible question] >> that list, and illinois the white house has already said that president obama is placed to help governor quinn. they had breakfast together.

can you assess what the impact will be in this big battle of having the white house and obama active in its? >> i think that remains to be seen. it is pretty clear that the governors' races are a little bit different from congressional races. the voters view them through a somewhat different plans. more local issues are involved. illinois is a state with the largest unfunded liability per capita of any state in the country. it is a fiscal train wreck. and i think the most recent public polling has literally less than to entertain people in illinois think the state is moving in the right direction. this race is rough. i think we have a great change argument to make. we have a great candid.

so the president can come and campaign wherever he wants. i think these governors races -- i think the one area where we see the obama impact in governor's races is on the intensity, and you saw that slide pointed out without question across the board whether congressional races, senate races, gubernatorial races. republican voters are simply more motivated right now. >> a question for you. it is a 2-partner. we have yet to hear anyone talk about that tea party. because of those senate races there are a bunch of independent third party that libertarian candid it's, if it is not close, how do libertarians affect this race? in general, what is the status

of the relationship between that party and the tea party on senate races? [laughter] >> first, look, you know, the grass-roots -- primaries are always, you know, religion and politics are the things your mom said not to bring up at the dinner table. if you look at the races, a tough primary in iowa. the team came together quickly and tightened up. a very tough primary. get through it, and you see his polling going in the right direction as a result, the republican base coming home. the for-profits conservatives based here in d.c., we are never going to get along with them. there are some that will have a role to play in a general election, but some of the louder voices, it does not in your to

their bottom line to get along with us so they choose not to. but where we can work together we will. i think at the grass-roots level that intensity is only moving in the right direction as we get through more and more primaries. we have exciting republican candid it's forthcoming this fall. so i feel pretty good about where we are with that. what was the second part of the question? [inaudible] >> oh, you know, i was on the ground in 2002. i understand the impact personally you know, it is a challenge. something that we factor in and it is incumbent upon us to model our research and polling accurately so that we can build elections and political plans that allow us to win.

you know, we would love to get their support even if they are libertarian or otherwise ideologically band. we will try to talk to them in a way where we can get their support in the chicken cross over and back the republicans. if you look at the senate right now is a diverse group of folks demand we have a lot of senators and national leaders who can speak to certain segments of the population that may not be -- whatever word you want to read to -- classic establishment republicans. we recognize the many voices in this senate, where everyone fits in. the great news about that, our senators are extremely engaged. how are engaged they are and how willing they are to really step up. use of the democrats yesterday , senator mccain engaged immediately and say, you know,

what is going on here. that is something i would not discount. >> i have been through election cycles where the base was not motivated, and it was not fined. coming out of 12 we had been a party that was of little, quiet party that did not have a robust conversation with itself. it would have been bad for republicans. we have had that conversation, some in primaries. what has come out the other end is a motivated base. i dare say the democrats wish they had a two-party in their base to help them. he looked at the polling we just showed you. the primary process, and a few competitive primaries left. we are through with that stage of the election cycle. what we will see his support for republicans up and down through all of these races, all the way down with a very motivated group of republicans that will turn out and vote and a not as

motivated group of democrats. the end result of the question is, we are in a good position because we have the motivated base. >> right. and at the local level we are seeing that enthusiasm swing behind the republicans. i sometimes have my d.c. hat on too tight. when i speak kagan not mean to be critical of all of the groups, but i think there is lot of energy at the state and local level where registering voters get folks out, talking to neighbors and doing a really, really impressive job. you see it weaving through these races. sometimes people say, oh, this big, national group this year. they don't understand that at the local level how it impacts our races. >> thank you. [inaudible question] >> you just described it.

[inaudible question] >> because of redistricting people are pretty much in the district where they belong. so, you know, where the field in 2010 was over 100 races, 12, about 75. fifty is pushing it. so i think, you know, 50 would be pushing it. how many races are in play this cycle, it has made the field much smaller. >> that is exactly it. [inaudible question] >> you used the term community organizing. data mining, trying to get out low propensity voters. you know how sarah palin disparaged. are you emulating the obama 2012 ground game? >> i would say we are rebuilding the republican party for moderate political elections.

you know, in 2004 we had an incumbent president, a technological lead on the democrats, and a superior ground game. i think we all admit that those are two areas we need to improve coming out of the 2012 election. our goal is not to catch them but surpass them. this is sort of like a space race. data and technology, leapfrog each other when it comes to how robust and efficient the ground and can be in the tools you can put in hand. i would say if we build the right. so we are creating a moderate political party that is full time creating data and technology tools to take advantage of those volunteers and help us win elections. it is not a matter of emulating. it is a matter of surpassing. [inaudible question] >> well, i think if you look at

their growth and opportunity part, there is a whole section on looking at what we could have done better and what we need to do better from the mechanical perspective. the person who is running our latino voter outreach program, there are things that we -- we brought in private sector talent from silicon valley. we looked at seeing where we could do things that we have done before. so, again, we are building a moderate political party based upon what we see that we can do to help complement the great things that our colleagues are doing to take a advantage of the political winds blowing in our direction. >> thank you for all -- thank-you all for coming. if you have any questions -- we look for to seeing you soon. thank you. [inaudible conversations] [inaudible conversations]

[inaudible conver >> a malaysia airlines jet, nearly 300 people aboard, eastern ukraine near the russian border. you was reportedly shot down with a missile. hold ated nations will security council meeting this morning on the downing of that boeing 777. have live coverage at .0:00 a.m., here on c-span of general motors testified about the recent g.m. recalls because of ignition problems. mary barra took questions from members of a senate commerce subcommittee. we'll also hear from kenneth feinberg. senator miscast kill of missouri chairs the hearing. ght. this hearing will come to order.

we revisit today the tragic management failures at gm that killed people. first, i want to acknowledge in my opening remarks then from my viewpoint the ceo of general motors, mary barra, has stepped up and con fronted head-on the problem and corporate culture that caused it. some see the record-number of recalls at general motors as a problem, i see it as a good sign. second, i want to briefly say that i think i speak on behalf of all members of congress who have asked very difficult questions surrounding these tragic events that while we are asking tough questions, we have great respect for the workers of general motors. i would like to take this moment

to thank the workers at general motors. you are terrific. you build good cars. and you also were the victims of outrageously incompetent management. management was the problem here not the workers. the report i spent time with i find it thorough and damming. there was indifference, deceit and imcompetence among engineers who had responsibility. and second it is clear that the culture of lawyering up and whack a mole killed innocent customers of general motors.

i have many questions about the failures of the legal department today. i am also interested today in hearing from mr. feinberg who has been asked to put together a plan to compensate those who have suffered from the management failures. he is hear independently from the witnesses of general motors and appearing independently of the witnesses of general motors and he will exhurt independence and i certainly thank him for being here in that regard. perhaps i am even more interested today in undering how in the aftermath of this report how in the world did michael

milikin keep his job? i don't understand how the general council for a litigation department that had this massive failure of responsibility how he would be allowed to continue in that important leadership roll in this company. and the questions i asked today will be surrounding what he knew and why he didn't know it and what kind of direction did he give the legal department that would allow them to do nothing in the face of the evidence they were confronting over years of litigation by people who were trying to get the attention of general motors about the fatal defect in the product they were selling.

senator heller. >> chairman mccaskill, thank you. and i would like to thank the witnesses here today for both hearings and also thank chairman mccaskill for this second hearing on general motors. today based on the findings of the report, we can confirm this is in fact the darkest history of general motors. an ignition switch was approved but it failed gm's requirements for torque requirements. the ignition switch would slip from one to accessory with a little more than a knee hitting the key or the car driving over a bump and the car's power shut off while driven. even for the most experience

drivers there is nothing more terrifying than loosing power at high-speeds. i can only imagine the terror these people experienced once their drives slipped out of run. what they didn't know was the one thing that could have saved their life, the airbag, wasn't going to deploy because the power to the airbag was shut off. if, after a few crashes, general motors was able to under the ignition switch problem, many more lives could have been saved. group after group, committee after committee within gm failed to take action or acted too slowly for over a decade. two critical factors have been identified as reasons for this. first, gm failed to understand

how its cars were build. gm failed to understand how its cars were build. incredible the official findings call to recall this on the fact gm didn't understand how its own car was built. second the same engineer who approved the original switch changed the part in 2006 and didn't inform any person at gm and didn't change the part number. people died and millions more were put at risk because gm didn't understand its own car and one engineer cut corners and changed the torque on the part without telling anybody or changing the model number. 54 frontal impact crashes and more than a dozen fatalities later we find ourselves here for a second hearing on this issue.

it is truly a dark chapter in the history of general motors. we need to make sure the report is the full story today. is this accurate or are there missing pieces? the ceo of delify is here today and it is my hope he will help the subcommittee understand if there is additional information that provides us with an additional picture. i hope the testimony is forthcoming and not circle the wagon. delify has a opportunity to the survivors and the family to provide a complete picture. if they know more than the lucas report identified or believed things are inaccurate now is the time to make it known. it offers a timeline of the issues but i have concerned it

may not point the entire picture. i would like to explore whether delify was cooperating. i am appreciative we are holding this hearing, chairman. everybody deserves to know that for over a decade gm and delify failed to have the basic level of competence. if gm understood how their car works and reported the defects in a timely manner lives would have been saved and we would not be here today. >> our first witness and panel c c consist entirely of mr. feinberg who is in charge of the fund

that will compensate the people that have suffered as a result of the failures. >> i want to thank the chair for her vigorous leadership in this matter. i want to thank all of the members of this committee and subcommittee. i want to particularly thank senator blumenthal and his staff and indirectly i must thank senator blunt indirectly because he was critically important.

i am with my partner who was worked for the last 35 years in the drafting, design of the 9/11 fund, the bp oil fund, the boston marathon and the virginia tech memorial fund. and she is here to answer questions about the administration of the program. it is a bit premature to talk about this program because we don't receive claims until august 1st. we are right an track. this protocol will form the bases for the submission of claims. i thank lawyers around the country for their input as to what this fund might look like. i think various non-profit foundations interested in auto motive safety for their input

and i also must say in line of what the chair said i thank general motors from the top down they have been helpful and constructive in drafting this protocol. this compensation protocol is entirely our collective responsibility. my responsibility. i don't think there is anybody who provided us input that is entirely satisfied with all aspects of the protocol. we will compensate the innocent victims of this tragedy. we begin august 1 and claims can

be submitted through august 31st. december 31st and we will stay in the work until january 15th processing the claims. we will take around and not disappear on december 31st. but there are interesting features of this program i can highlight in one minute. it is uncapped. we are authorized to pay as much money as is required. the bankruptcy of gm is no barrier to compensation. if there were accidents that occurred before the bankruptcy they are as eligible as accidents that occurred after the bankruptcy. there are some people who already settled their claims years ago with general motors

and signed a release that they will not sue. they can come into this program and if under our compensation rules they are entitled to additional compensation they will be paid. the contribute of the driver speeding, cellphone, int intoxication is irrelevant. we are not looking at the drive or the driver's negligence. we are looking at only the automobile to see if the switch was the approximate was of the accident. we are cautiously optomistic.

i believe on august 1 we will be ready to receive claims and we are finalizing the documentation that will we'll deliver to the subcommittee and be ready to receive claims and pay them within 180-190 days after the claims are deemed complete. and finally, we have a very pervasive notice program to reach out to all eligible claimants and those who think they might be eligible. we are determined to reach every driver or injured victim to make sure they know of the program and we are confidant the program will work. thank you. >> a couple questions, mr. feinberg. when they hired you to

administer this program, did general motors lay out any limitations and if so what were they the? >> the only limitation they layed out was the limitation that only certain eligible vehicles are subject to this program. as the chair knows in bp there were limitations, in 9/11 as senator blunt, then congressman blunt drafted that legislation there were limitations. the only limitation they insisted on was only the vehicles lifted on page three of the protocol are eligible for consideration. >> did you suggest classes or coverage that should be included that general motors rejected? >> no. i am not an automotive engineer. i asked jenerageneral motors wh

the definition of a vehicle that could give rise to a valid claim which is reflected in the protocol. >> so, if the airbags didn't deploy but should have, and any evidence the seat belt worked as design, under the protocol the victim isn't eligible? >> the victim isn't eligible if the power was on and the airbag did deploy. if the airbag deployed and the seatbelts were working, the likelihood that the ignition switch could have been in the off position causing the accident isn't possible. so we and i concluded that airbag deployment renders the claim ineligible.

airbag non-deployment or the claim where the victim says we don't know whether it deployed, eligible and we will work with the claimiant. >> if the airbag didn't deploy, you are eligible if you are in one of the cars on the list regardless of the seatbelt? >> exactly. >> so the total decision here is what car it is and whether or not the airbag is deployed. >> and/or whether the seatbelts deployed. if the seatbelts deployed, the power is on, it could not have been the ignition switch. >> you mean whether the seat belt is on? would you explain that for the record? >> it is non the seatbelts per se it is the pretension which is

controlled by electric control so if they were working if is unlike unlikely the cause it was an ignition switch. >> so you have saying if that is working it would not be a power shutdown. what if you have a situation where there is a fronting crash and the airbag doesn't deploy and there is a rear crash and the airbag does deploy. >> if there is a frontal crash and the airbag didn't deploy we want to look into the claim. >> so that would be a situation where the airbag did deploy but not until the second crash so i want to make sure everyone is clear even if the airbag didn't deploy -- even if the airbag did

deploy it could depend on the facts of the case. >> i would like to take a look at that claim. >> i think there is one. >> we would like to take a look at it. >> this is the issue, this switch goes off and on easily, right? it slides to off easily, it slides back, because there is not appropriate torque in it. so things that bump it, move it. so just as easily as writing off a road could bump it, a frontal crash could move it from off to on, correct? >> we looked at that. i think you are correct theoretically. first it is highly unlikely that that circumstances that you just said occurs. i guess it could. it is highly unlikely. what i want to avoid with this program is being inidated by

thousands of claims where the airbag deployed making it unlikely it is the ignition switch causing delays to get the money out the door to the vast number of people that can demonstrate airbag non-deployment through pictures and police reports. and the key to the program is getting money out the door as fast as possible to those who are eligible. that is why the airbag non-deployment provision is designed to discourage thousands of people from filing a claim when in the overwhelming number of cases airbag non-deployment is a certain step in finding eligibility. >> i have questions about the

amount of money and punitive damages but i have a feeling my colleag colleagues will have that. i turn it over to senator heller. >> thank you, madam chairman, and again thanks for being here. i don't know if is premature to have this discussion because i think it is the perfect time. there is no scenario, you are saying, where the key went from run to accessory, have an accident occur and still have the airbag deploy? >> that is right. senator mccaskill raises the hypothetical situation but it isn't likely that would justify drafting a compensation program that would invite anybody with the airbag deployed to file a claim. >> it took ten years to figure out the problem and you are saying that scenario can't

happen. >> it is so rare. you don't want to discourage claims from being filled by the overwhelming cases for airbag non-deployment is a step in finding eligible. >> you say you are going to compensate all victims. let's say i am driving a colbalt and airbag doesn't deploy and key goes from run to accessory and i walk away unscraped but i destroy the car. am i compensated? >> you maybe compensated but not by the death and injury case we are talking about. that is not the scope of this program. >> why would you stop there? isn't a loss a loss? >> a loss is a loss from the

very beginning in my conversations are lawyers representing injured and deceased victims it was always understood this program, like 9/11, and like one-fund boston, is limited to death and physical injury. i am not saying those folks don't have a valid claim they just don't come to this program. >> is there a way to appeal that decision? >> in the courts, i guess. >> can they appeal to gm? >> i guess they can. >> i want to ask about the compensation. i don't know if you have performance goals and compensation and knowing you are

being compensated by gm i think transparency is important. will you or your staff be paid based on the number of claims made or processed or anything of that gnash nature? >> absolutely not. >> let me talk about bp a little bit. i know victims of the fund did receive criticism that you are working for the oil company's interest instead of being independent. >> i will say.

>> and he wrote an opinion letter making it clear that i was independent and doing the type of work that i was asked to do. the only real way that you blunt criticism that is sure to come about my compensation is how fast you get the money out the door to claimants in a generous way so they can see the conduct of this program and the professed independence is backed up by the way these claims are being processed. and i will say again until the claims begin to come in and people see how they are being processed and found eligible i will also confront that and that is the way you have to address. >> all right fine. thank you.

>> the investigation into the general motors ignition switch defect paints a picture of a company that for years showed n indifference in the face of mounting evidence, risk and danger. i believe there are questions to be answered and a keypoint for victim said and mr. feinberg a key point is how the fund and claims will work. i greatly appreciate the fact that ms. barra, the new ceo of gm stepped up and took this head-on with the recalls and setting up this fund and working with the victims. something very bad happened here and we all know that. and as you know mr. feinberg only the results and history judge whether there is true justest for the victims. i am glad the chairman held this so quickly after the last one so

we can continue to be informed and ask questions. i have a victim in my case, a young woman, she was from minnesota and she was only 19 years old. she died when her car went barreling at 71 miles per hour into a grove of trees. she was a goalie and wrote a lovely note to her bad before she died about how he always had her back and all they want now is to make sure that gm has their back. so my first question is about these young victims. since many of the cars involved younger drivers they were like the saturn -- i am a saturn driver and i have a 15-year-old saturn and a chevy cobalt and that was the kind of car she was killed in -- the chevy cobalt.

can you ensure there is going to be fair compensation were the younger victims when it is harder to assess what their financial loss is. >> absolutely. like on 911, we will make sure compensation is adequate and it lays out in detail how we will estimate compensation for people in school or haven't started a professional or employment career. and we have rules that lallow younger victims who died or were injured to come in and see us and we will develop a tailored compensation program, what i call track b, that reflects the

unique circumstances of those younger people and we will be glad to do that under the rules of the protocol. >> you anticipate a lower rate for younger people because you have not seen this in the past? concerns have been raised about the documentation required that it maybe burdensome and some say it maybe difficult to prove an ignition switch called a crash a year ago. >> it is a lot quicker than going to court and proving their claim. there is a provision that makes it clear if anyone can't find the documentation, we will work -- this was a point senator blumenthal asked about -- we will work with that claimant to cure that deficiency. there are various ways for

documentation. the police report, the car, the black box in the car, insurance reports, warrant, photograph said -- perhaps the best example of collaboration using senator mccaskill's picture of a front end crash with no airbag deployment. that is well on the way to elability. we will work with them even though some accident are older. >> and one last question, under the terms of the 2009 bankruptcy, gm is free from liability for injuries and deaths that occurred prebankrupt prebankruptcy. can you make sure they will have coverage no matter when gm went through the bankruptcy?

>> yes, that is absolutely assured. >> senator blunt. >> thank you, chairman. the chairman and i -- we have a number of gm employees in our state and we are grateful for those employee and the work they do and concerned about anything that reflects on their products and future opportunities and their ability to make the good living that they make with the hard work they do and so looking at this is important to us. it is important to the country. mr. feinberg i appreciate your comments when we set-up the model after 9/11 the idea is the one that you continue to pursue which is victims are not subject to which judge they are assigned to. you don't have cases handled one day somewhere and one way somewhere else. they have the legal option if they want to take it but if they

want to be sure the cases are handled in a way with structure they have that prom from you. you have the authority on what the ultimate settlement is? >> that is right. the program is volunitarily and if they come into the program we will determine their eligibility and if eligible the amount of compensation and only after they know what they will receive, how generous it is, only then do they agree to wave going to court in order to receive this money and there is no appeal from my determination and gm cannot reject our final determination.

and am i right in believing that gm has no input on what the final determination is on what an individual case could be? >> once i get the claim they have no say or right to appeal or any right to second-guess. they are bound by that determination we make. >> at what point do you think you will begin to deal with the individual cases? >> august 1st the claims come in and once the claim is deemed complete and we have the documentation then within 90 days we will begin to process the claims and invite them to accept the compensation.

>> and where you said you were grateful to gm in helping draft the protocol. was there anything they added in the protocol? >> yes, i asked lawyers about the entire protocol and what they think about the dollar levels, the process, or the procedures. and i must say general motors from the ceo to mr. milikin and down the line were constructive and wanting to do the right thing they say. ...

sad last and only thing to have over that young girl's life. ll be interested as you work you r way through this and i think the company made a good choice and look forward to watching is a this progresses. >> senator. >> thank you few having this hearing. thank mr. feinberg for your work, very challenging work in this area. i have only five minutes here

but you have spent many more than five minutes in fact more than five hours talking to me and my staff, and i appreciate your openness and hope we can continue to work on many of these very profoundly important details, but the devil here is in the details and in the discretion that you will have. i want to ask you about one area of what i hope is within your discretion. on june 30th of this year, when you announced the details of your compensation protocol, gm announced the re-call of more than eight million cars that had ignition defects, defective ignition switches. the company acknowledged those defective ignition switches beyond the models involved in your compensation fund so far. caused at least three deaths and numerous injuries.

added to the list of the chevrolet cobalt and saturn ions we have multiple modeled of chevrolet, oldsmobile, gm has re-called more than 14 million cars in 2014. many of the reasons for the re-calls are defects in the name part, the ignition switch, that killed people and injured many in the matter that you are providing your compensation fund. i happen to believe that the compensation fund has to be expanded. i believe strongly that your funds must be extended to include those victims of deaths, injuries, and damage in those other re-calls. would you agree with me? >> i can't agee or disagree.

i have no jurisdiction, senator, and i can be very clear on this. just as with these other compensation programs we're policymakers tell me, in drafting your protocol, this is what is eligible. i have no authority to go beyond the list of automobiles listed in this compensation -- >> would you recommend to gm it expand the fund? >> that's entirely up to gm. that is entirely up to gm. i'm not an automotive engineer, and all i can say, senator, is that when gm asked me to create a fund and for us to administer the fund, they made it clear the only models where this problem and the context of the problem gave rise to this special compensation on these models, and as with 9/11, and with bp, i

must abide by that delegation of authority. >> let me move, then, to another topic. i can tell you about instances where the air bags deployed and the crashes resulted from this defective ignition situation. the hypothetical scenario we have been discussing here is a real fact. i've talked to people who drove those cars, they stalled, and they were able to turn them on, and i can present to you specific instances of crashes. will you consider them and make refunds? >> i want to see those claims. i've talked in the last three or four months to automotive engineers, to lawyers, to gm officials. i think it is such an unlikely possibility, despite -- but if it is, i'd like to see that claim. i would. >> let me just close with this

thought, and -- the observation made by chairman mccaskill about the lawyering here. lawyers typically are supposed to be the corporate conscience. the ones who make sure that corporations comply with the law in spirit and letter. here, the lawyers for gm actually enabled coverup, concealment, deceit. and even fraud. and i believe, although we use the word "appeared" as lawyers all the -- "alleged" the criminal investigation will find cuppability on the part of the lawyers, would you agree as someone would has an member of this profession with great

distinction for a long time. the lawyers here failed the public -- >> i agree that the lawyers worked in the public interest, or should. i don't know enough about the underlying circumstances that give rise to this to make an official on the record decision about the lawyers in this case. i just don't in know the answero that question. >> thank you. >> thank you. >> senator baldwin, welcome. here as a special guest of this committee today, and we welcome you, and welcome your questions. >> thank you, chairman mccaskill and ranking member heller for allowing me to join you today. i'm not a member of the commerce committee, but i have had discussions with family members and let me just chair by way of an opening statement that on the night of october 24th, 2006, three girlfriends, natasha, who

you heard about earlier from senator klobuchar, elaine, and megan, were returning from a trip to a wal-mart in a border county between wisconsin and minnesota. they were heading east on highway n in a 2005 chevy cobalt that suddenly lost we're. the steering wheel locked and the car careened into a telephone pole and the air bags never called. the accident killed natasha and amy and left megan seriously injured. as you heard from center lobe share, natasha was a goalie on her hockey team and her parents could count on one hand the numbers of times they had seen her in a dress, and she also had an artistic side. the first thing that comes to mind when amy's parents, teachers and friends remember

her, is her laugh. it was infectious. and once she got going, her whole class couldn't help but join in. she loved playing with her nieces and nephews and deemed of one day opening a daycare to work with kids professionally. officer keith young, a member of wisconsin's state patrol technical reconstruction unit, was one of the first officers to arrive on the scene that night. a 20-year accident construction veteran, officer young was able to correctly identify the cause of the crash, that the ignition had been turned from the run to the accessory position. shutting off the car's engine and disabling the air bags. officer young sent his report to the national highway traffic safety administration, nhtsa, and subsequently to gm. despite the careful analysis, neither it nhtsa nor gm took

action. for the parents of these wisconsin girls-this hearing, of course, is of little solace. nothing we do here today can repair the damage that has been done. the best we can do is work to ensure that no other family has to endure what they have, so i again thank the chair and ranking member for allowing me to join this. mr. feinberg, for you i only have one very simple question, hope. one of the victims in the october 2006 accident was sitting in the back seat of the car. her family expressed concerns to my staff in preparation for this hearing, that gm did not consider this victim one of the official 13 victims because there is no backseat air bag that could have then failed to deploy. mr. feinberg, can you shed some

light on if the back-seat passengers will be included in this compensation program? >> the answer is, absolutely, yes. not only the back-seat passenger. pedestrians are included. occupants of a second vehicle that collide with the defective vehicle, all included, all can file a claim based on your summary sounds like a very eligible claim, whether you're odriver, passenger, pedestrian, or the occupant of another vehicle, all eligible to file under this program. >> thank you. >> thank you, senator baldwin. i just have one question, and then we need to move ton the other panel because we have a series of votes at mid-day. mr. feinberg, there's no punitive damages in this, and this is a very difficult and gut-wrenching decision for lawyers. so i want to make sure i understand this procedurally. if, for example, a victim from missouri is 81 years old, obviously her damages in terms

of compensatory are going to be smaller because she was nearer the end of her life. her case is such that i think factually, there would be a strong case for punitive damages. if she files a claim and gets an award from you, is she then obligated to take that award or can she leave it on the table and allow her attorneys the opportunity to litigate the issue as to whether or not her claim can still be heard because of misrepresentations that were made in bankruptcy around the gm bankruptcy filing. >> if i understand your question, the claim will -- the compensation will remain on the table for 90 days, during which time the claimant can decide whether to accept the compensation, release her right to litigate for punitive damages, or decide, nope, i

think i'm going to go the litigation route and try and get not only compensatory damages but punitive tajes as well. that's entirely at the option of the claimant. >> really a terrific choice for a lawyer, which i know you appreciate based on your background, because typically the bar to overcome a bankruptcy decision as to what claims are discharged is disto overcome because you have to show that there was fraud. and that is a high bar in the law. on the other hand, it seems hollow, i think, to many of these victims' families that just because their loved one was at a certain age or a certain income level, general motors will really never feel the brunt of what punitive damages are designed to do, and that is to penalize a corporation for exactly the kind of conduct that

was present at gm. i'm sure you acknowledge this is a very difficult decision for these families. >> i do acknowledge that. now, of course, you and i can agree that if a claimant decides that 100% compensation leaves open the question of a punitive damage verdict against gm, there will certainly be some lawyers and some claimants who will opt to seek punitive damages. so, it's not as if a claimant who comes into this fund and decides to accept full compensation -- it's not as if there is no option for somebody else to go and seek those punitive damages. i think one way or the other, your hypothetical is true, senator. somebody is certainly going to go after gm for punitive damages. it's just under the hypothetical, wouldn't be this claimant who decides, i want 100% of this money right now. >> i understand, and i just wish that we could leave this open longer so there would be time

for that tissue be litigated. -- that issue to be lit gated so lawyers are makinged a vase based on decisions the court had made. >> you know how long that would be. if there is going to be litigation over punitive damages, you're talking about years and years of uncertainty in that regard. >> i understand that. thank you, mr. feinberg. >> thank you very much. [inaudible] >> we'll move the name tags. if you want to sit where you would like to sit and we will make sure the name tags get in the right spot.

>> thank you. if you could take your seats. we're under a time constraint here, which i know you hate to hear. [inaudible conversations] >> we will begin the second panel of this hearing, and i want to make sure that the members of the committee know, and the public knows, we'll have another followup hearing dealing with nhtsa. the reason nhtsa is not on the panel today is because we're planning a hearing. we have to look at the reauthorizes of the national highway traffic and safety administration and we want to look at the highway safety proposals in the coming weeks so we'll cover nhtsa at that time. thank you all for being here very much and we'll begin with

your testimony, mr. milliken. >> senator mccaskill, ranking member heller and members of the committee. before i begin i want to say to shows who lost loved ones and those who were injured, i am deeply sorry. i know we as a company, and i personally, have a responsibility to make sure this never happens again. i am the general counsel or general motors company. i've worked for gm for 37 years. prior to that it was an assistant u.s. attorney and before that it clerked for the honorable vincent brennan of the court of appeals. the investigation revealed the failures behind the ignition switch re-call, including failures -- when miss bar r today before the committee on april 2, up number of you raised serious and important questions about the performance of the

legal staff. and our responsibility in this tragedy. as general counsel, i'm ultimately responsible for the legal affairs of the company. and i'm here today to answer your questions. i first learned about the ignition switch defect in february of this year. i immediately took action. i wish i'd known about it earlier because i know i would have taken action earlier if i did. we had lawyers at gm who did not do their jobs. didn't do what was expected of them. and those lawyers are no longer with the company. i have taken and will continue to take steps to make sure something like this never happens again. the report contains detailed recommendations for how the legal staff, a improve and serve a greater role in meeting gm's commitment to safety. i'm assured the implex of each and every recommendation and have made and will continue to make other changes to help

improve. i have directed that before any settlement or trial of a case involving a fatility or serious badly injury, the case be brought to me for my personal review, with a focus on open engineering issues. i have re-organized the legal staff to foster sharing of information and the identification of emerging trends, including elevating a senior attorney to be the chief legal advisor to jeff boyer, vice president of global safety, with a direct reporting line me and another reporting line mark royce, executive vice president of global product development. i have supplemented existing legal sources with attorneys from two outside law firms to make sure that we have the proper level of engagement. i've also appointed a well-respected outside law firm to conduct a zero-based review of our litigation practices. finally, i've met with the entire u.s. legal staff to discuss the report findings and

to set high expectations for the staff going forward. these changes and others will nut greater transparency and information flow on issues of safety within the legal staff as well as the team of legal staff and the company generally. and i'm committed to make sure that i, and gm's senior management team, have a full line of sight into all safety-related matters. gm's legal staff is compliesed of hard-working, dedicated professionals of the highest integrity. they strive daily to help global gm work in a lawful and ethical matter. the express deep regret because of the actions and inactions of some individuals within the company, including some on the legal staff, who failed the company and our customers. the gm legal staff is dedicated to helping gm become the leader in automotive safety.

we now have to correct our mistakes, and we are. but this is only the beginning. all of us at gm are committing to setting a new industry standard for safety, quality, and excellence. we must do better. we will do better. i am personally committed to this. thank you. >> thank you. miss barra. >> when i first appeared before you we were in the earliest stages of the ignition re-call. i promised you i would get answers and be fully transparent. i also said i would not wait to make changes. i understand six mistakes that led to the ignition switch re-call are well underway. as a result we're building a stronger company that places customers and their safety at the center of every aspect of our business.

and in a town hal meeting before thousands of gm employees emplod several thousand more around the world via satellite, we accepted responsibility for what went wrong. i told the men and women of gm that our actions would be guided be two clear principles. first, we would do everything in our power to make sure this never happens again, and we will do right for those who were harmed. it is on this very important point that i want to begin. i want to recognize the families who lost loved ones and those who have suffered physical injury because of these mistakes. to each of them, i extend my and our gm employees' sympathies. we will not forget them. nor the special responsibility we have to them. we are committed to treating each of them with compassion, decency, and fairness. that is why ken feinberg will independently administer a compensation program. mr. feinberg has talked about

his compensation program. it is, howeverring are worth noting that he has complete and sole discretion over all compensation awards to eligible victims, and this is very important. there's no cap on this program. as i stated earlier, we want to do all that we took make sure -- to make sure this does not happen again. we created the program as a response to a unique set of mistakes. the report was only a start, and many changes were in motion even before we received the findings of the report. i will use the report's findings and recommendations to attack and remove the information silos wherever we find them and to create an organization that is accountable and focused on customers. i'm committed to acting on all of the recommendations contained in the report. action wes have already taken include, elevating safety decisionmaking to the highest levels of the company. i've created a new position,

vice president of global safety. he has full access to me. we removed 15 employees from the company. some for misconduct, and incompetence. others because they didn't take responsibility or act with a sense of urgencies. we instituted an encourage safety program that encourages employees to bring potential safety issues forward quickly and we have investigators to identify issues much more quickly. we have aligned legal staff to help assure greater transparency and information sharing among the staff and across all business units around the globe. and most importantly, we created the product integrity organization, which brings a complete systems engineering approach to the safety of our vehicles. overall we're dramatically enhancing our approach to safety. you can see until the aggressive stance we're taking on recalls

with the redoubling of our evers. we're bringing greater rigor, discipline and urgency to our analysis and decisionmaking. we're mining every source of data available to us from the factory floor, warranty information, customer calls, legal claims, and social media. we are not waiting to see if a trend develops or updating spreadsheets. we want our customers to know when we identify an issue that could possibly affect their safety, we will act quickly. yes, we have re-called a large volume of past models, a result of our exhaustive review out of the ignition switch re-call but also conducted 12 rerecalls of less than 1,000 vehicles in four of less than 100 this year. this demonstrates how quickly we are reacting when we see a potential issue. i also know that the recent efforts and the current frequency of re-calls have garnered considerable attention, but placing the highest value on customer safety is what our

employees want to be known for. we want stand as the company that is setting the new industry standard for safety. our employees will not forget what led to the ignition switch re-call but they also don't want to be defined by it. after my town hall, could hear it in their voices, i could read it anywhere messages -- it in their messages. they're all in to make this a better company. i believe in them, and together we have been working hard over the last few months to address the underlying issues that caused this problem in the first place. since that town hal i have been inundated with calls and e-mails from employees telling me they're more motivate than ever to make gm the best possible company for our customers. this is our mission, and i won't happen overnight but i can tell you we are holding each other accountable to do exactly that. we are 100% committed. i appreciate the opportunity to be here today and i welcome your questions.

>> thank you, mr. barra. mr. o'neill. >> thank you. chairman mccaskill, ranking member heller and members of the subcommittee, thank you for inviting me here today to testify. my name is rodney o'neill and i'm the chief he cantive officer and president of delphi automotive. first and form most, on behalf of delphi, want to express our profound sympathies to the victims and their families. people were hurt. and lives were lost. we must work together to avoid tragedies of this nice tour going forward, and this -- that's it in tour going forward and this subcommittee is part of that effort. i appreciate the opportunity to address important issues we're considering. we fully support your efforts. i would like to discuss today three main points. first, delphi's efforts to

provide replacement parts and support general motors in connection with the re-call. second, our cooperation with the subcommittee and other governmental bodies as well as gm, and, third, the review and reinforcement of delphi's key product engineering safety policies and procedures. now, with regard to my first point, i'd like to provide some information pertaining to delphi's production of replacement parts for general motors. the vehicles that were re-called were went out of production several years ago. as a result there's been a monumental task to build over million switches in a matter of months. we ordered new tooling, installed three new production lines, and we trained additional workers. at this time we have shipped over 1 million new switches, and we're on track to deliver more than two million switches by the end of august. we have done all of this so the consumers can have their

vehicles repaired by gm as quickly as possible mitchell second opinion is that delphi fully supports the sub committee others efforts and those of the house energy and commerce committee and other governmental bodies. our support has included conducting an exhaustive review and providing relevant documents and meeting multiple times with staffs of the subcommittee and several agencies, and in addition we have cooperated with general motorses in the re-call and its investigation, and our cooperation includes entering into a reciprocal document sharing agreement and we have provideed relevant documents with the agreement. lastly, we have conducted a tour re review of our -- thorough review of our current pom skis procedures related to safety which we believe are robust and we're continuously working to improve. for example, at my direction, we

have ian force our global engineering team the importance of raising safety concerns so they can be handled properly. we have strengthened our procedures to ensure that safety concerns are communicated across all relevant functions within our company and that includes reports to senior management and customers, and we are committed to acting upon all such concerns in a timely manner. the industry has created a new standard to focus on how these complex safety systems work together instead of part by part. we support this new standard, and given what we have learn from these tragedies, this new standard should be very helpful going forward. my written statement provides additional details. and i will be pleased to address any questions you may have. again, thank you for this opportunity to testify today. >> thank you, mr. o'neal. >> thank you.

chairman mccaskill, ranking member heller, and members of the committee. thank you for asking me here today to testify about the cobalt ignition issues. in march of this year, general motors' board asked me to determine why it took so long to re-call the other can cobalt and other vehicles that contained the faulty ignition switch. my explicit mandate from the board was to provide an unvarnished report has to how and why that's occurred, pursue the facts wherever they took us and to put those facts into a report. ...

>> in that research in terms of the investigation, we have looked at every ceo and all of the engineers and we have used search terms to produce documents of any kind which might relate to this issue. so no one was exempt. i will now summarize the report and i will note that among the issues that we specifically examined are the issues are the topic of this hearing. accountability and corporate culture. we asked questions from thousands of dozens of witnesses from top executives align

engineers about these topics and we examined the decision-making processes that we can be ignition switch issues and whether there were broad cultural issues that contributed to to that delay recall. the story is one of a series of individual and organizational failures that led to devastating consequences. throughout the decade the them time and there was a lack of accountability and urgency and a failure of personnel charged with the safety of the company's vehicles to understand how general motors vehicles were manufactured. in our report we reviewed this, including cultural issues that may have contributed to this problem. at the board's request we provided recommendations to help insure that this problem would not occur again. i'm happy to take your questions and i thank you. >> thank you and i want to say

that many members of this committee have worked very hard in preparation for the hearing and it would be terrific if we could get questions in, i would ask everyone to be very respectful. if i say the time out loud, maybe i will be better so we can try to get to rounds of questions and before we have to leave for vote. okay, so spending time on this first round with you. we want to make sure that everyone understands what punitive damages are. and what they are, for lawyers that is a pointing red light and i'm sure that you understand that they are designed to punish corporations or people for conduct that is outrageous and egregious. it is a method by which justice can be done by punishing bad behavior and the pattern was

emerging at general motors for almost a decade about these cars and there was some confusion because of deceit on the part of at least one engineer. but in october of 2010, your lawyers and this was on a plaintiffs lawyer that was out there making a frivolous lawsuit, lawyers that you hired said that you are possibly subject to punitive damages over the way you have handled this problem and that was in october of 2010 and i believe that you were the general councilman. >> that is correct. >> again, in july of 2011, your lawyers told you that there is a potential for punitive damages because of this factual scenario

and you are also the general councilman. >> that is correct. at that point in time lucy clark gordy in july of 2011 was general counsel for north america. is that correct? >> yes. >> believe that she began up a position in march of 2011. >> i think it was in 2012, but i could be wrong. >> my documents in march of 2011. then in april of 2012, another one of your outside lawyers warns that your department, that you are subject to punitive damages, which could be millions of dollars with a corporation the size of general motors. at that time lucy clark gordy was general counsel for north america. so again, in april 2013, almost the same time that you had this bombshell locked where digiorgio

was confronted with a basic engineering task that had been done, showing the switches have been twitched out and changed and the part had been changed and once again you are one about punitive damages. >> that is correct. >> so you have a legal obligation to report it liabilities to the securities and exchange commission. did you ever do that about this issue remapped. >> on the issue of this? >> on the issue of the surrounding it. have you ever reported it to the fcc? >> not up until the time that this became known. >> i'm talking about from the time that i knew and excluding that, no, we have not. >> subsequent to that we may have made a filing about the ignition switch recall and that is correct. >> and what about the legal

obligation to inform the board of directors. were they aware that you they were telling you this car would cost the punitive damages? >> they were not. >> and what about financial reserves. were you entering the financial reserves necessary to cover this liability which is your obligation? >> we were not entering any reserves to cover the punitive damages. no, we were not. >> okay, so i don't get how you and lucy clark gordy still had your jobs. can you explain that to me? >> i think you done a lot of good work since he took over, as i said in my opening statement, you have handled this with courage and conviction. but for the life of me, this is either gross negligence or incompetence on the part of the lawyer, the notion that he can say that i didn't know. >> senator, i respectfully disagree, as you know, i have a

promise to fix what happened in the company and make sure that we are dedicated to safety and excellence and we are well on our way and we have made a significant change to do that and to do that i made the right team. mike is a man of high integrity and he has tremendous global expense as relates to the legal profession, he's the person that i need on this team and he had a system in place but in this instant instance it was not brought to his attention and frankly by people who brought many other issues forward. he is a man of high integrity. >> so there is no system in place that your lawyer said that you didn't get it to your desk? house that not incompetent? how can you not have a system in place that you are at least, as lucy, that we have our lawyers telling us within a couple of years something you had not even talked about calling punitive damages.

how can you have a system in place that doesn't account for that. >> we haven't seen your lawyers that have been information who didn't bring it forward and who are no longer what this company. >> device with the company and she has a knowledge. >> as we went through the details of the report very carefully, and i would say when in doubt we reached further to take action, there are many lawyers that are no longer with the company. >> my time is up, i think there's been a blind spot, i think the failure of the legal department is stunning and the notion i mean, you look around the government and when something like this happens, secretary eric shinseki didn't know about those problems with scheduling and nobody told him. and he is gone. >> madam chair, thank you. i want to thank our witnesses for being here and taking the tough questions. thank you for being here also. completing the circle here, i would like to ask you a couple of questions regarding your

products. and i don't have a lot of time. so the complaints, as they started piling up in the mid-2000 on your product, we have conducted part of this to determine whether your part is at fault. >> we were not aware of this, of this situation and that until february of this year of 2014. >> so if you didn't know until february of this year, obviously not. is there any reason to believe that anyone in the company may have known? >> and the exhaustive reviews that we have done with our documents and after talking with individuals, it was clear that the delphi team, in working with

the general motors team on this particular situation, we were very concerned about customer satisfaction and quality issues. >> is there a possibility that an individual in your company simply didn't take it to the top? >> we will need, we looked very hard, there's no evidence of that because it is quite clear the mindset was based on information that they were given and they were working on quality issues and not safety issues. >> did anyone raise concerns about keeping this the same with these individuals or was that a decision at gm? >> standard protocol and are in the tree is that the original equipment manufacturer, in this case general motors, they determine the part number and they control that part number, so if there is, if that partner is ever to change, the car

manufacturer would dictate that change. >> do you feel that you shoulder the responsibility, sir? >> well, let me explain some very important information and i think it would lead to that discussion of an answer for you. we had a product that we worked with at general motors to develop and that was the switch cannot switch had a certain set of requirements. often when we work with the customer and general motors in this case, those are ireland's that can become more stringent or stay the same and in this particular case they were made less stringent to me what mr. de luca said, the very european-style switch. so hence the lower torque which was ultimately approved by

general motors in that part met the requirements that were dictated. they then met with a subsystem called the ignition switch. >> do feel that delphi acted responsibly? >> our product met the requirements. >> no responsibility? >> no. >> okay, seleucus, i understand that there was an agreement that wasn't as forthcoming as he would've liked it to have been. using the limited information he received and their employees prevented you from providing a complete report? >> no, i believe having had the chance with the extra six weeks and looking at what we have, i think the report is complete and uncomfortable that the delphi aspect, that we have that information.

>> we have do we have any other information that is relevant? >> no, we committed to an earlier committee that we found something different, if there's anything factually that we learned that would alter the report in a significant way, that we would supplement the report. and i would make a commitment to this committee. but right now i believe that everything that we could no about this issue, we put forth in that report or a supplemental letter. >> you feel that delphi shoulders and a responsibility? >> that is a legal question and i can tell you that we at general motors approved this switch, knowing that it was the low torque values and that was what the gentleman gave to delphi and they switched it in accordance with that approval. >> do believe that they shoulder and he responsibility of the

third team that's? >> where the company that is responsible to integrate products the product into the vehicle, so it's our response to what he. >> thank you. >> thank you, madam chairwoman, take you to all of you as i spoke earlier. one girl was going 70 miles per hour into a grove of trees in wisconsin and this story is not just tragic because we have constituents and it's tragic, but it turns out to be an important part of the report in terms of what happened here. in this case in wisconsin state trooper conducted an investigation himself after the crash until he made the link between that effective ignition switch. it cracked the code that seem to have abated gm's engineers and

lawyers for years and he wrote in his report and this report was in their legal department as of february 2007, he said that the two front seats airbags did not deploy and it appears the ignition switch had somehow been turned to accessory prior to the collision with the trees. and this, did you interview people about this report and did you figure out why no incidents had read it in gm? >> what happened with this report is that the reporter, and i believe it quickly analyze the situation back in 2007, it was collected by jim is part of this isys report, which was the claims administrator putting into what is called a rumor file. at some point it was accessed by a paralegal who then sent to this part of the thread of responses. at no point had we had distributed by outside experts

or was it access between then in march of 2014 when the investigation was undertaken. so during that time it was in those vials and no one looked at it other than back in 2007. >> so this is like an official state to the report. so i think there's also an indiana university study and they were commissioned to look at this crash as well and is that also in the final? >> no, they actually did not even have that even though it was publicly available, gm did not gather that information and that was not something they had until 2012 when an outside expert made it available as part of their reported. >> back to the troopers report, how could it be that for seven years you are trying to figure out we're starting to see all of these non-employment cases that no one saw these reports and looked at them.

>> i think what you're seeing is an example of what his report identifies and that is actually this document that was not one that was searchable that people would use normally. it's my understanding from this report. and we are doing what we can to make sure that we do have this on a going forward basis. it's a tragedy that cannot happen again. i'm making sure that we make the changes that we need to. >> i do appreciate that you have come forward and have been a front end set up the compensation fund and as i said, we will not know if justice is done until we see the outcomes are. and i appreciate the work that has been done. so one of the things that mr. lucas wrote, although everyone had responsibility to fix a problem, nobody took

responsibility. a top executive described in is when everyone nods in agreement to a proposed plan of action when this happens, but then leaves the room and does nothing about it. so what concrete steps have you taken to be able to implement to get rid of what we call the gm nod and how you ensure that you move from this culture of diffuse responsibility to define responsibility? >> i would like to say in my career at it, i've never accepted it and it's not appropriate. we make a very complex product and it's important that all voices are heard. so the way the change culture is by demonstrating the behavior and making sure people understand what your expectations aren't calling them out when they don't, another demonstrating that, both on my leadership team and my direct leadership team who is 100% committed to that. and i have talked openly about

it. when i talk to our employees openly after i read the report, which i found deeply troubling, i told him them that and i told him that that behavior was unacceptable, but the true change would be by behaviors. i'm intent on making sure that the right behaviors or continue going forward. >> thank you. >> we have a custom in this committee that when the chairman of the ranking member shows up, he can cut in line. so i'm going to abide by that because it can be an absolutely appropriate custom. >> that makes you really popular, madam chairman. [applause] >> i appreciate and i thank you and i think both you and center for holding this hearing and staying on these issues because it's really important that we examined the developments following this recall issue and i know you have been working

very hard and we have all shared the desire to this going. gm has admitted that failed to report the safety related defect in a timely manner and the internal report prepared by him expresses the failure of accountability of oversight and urgency of engineering and as we all know, the delays can cost lives i know that i expressed my deepest and these to those who were injured or lost loved ones and i guess the question that i have today, and i welcome the very public steps you have taken to address the needed changes within gm, some that you discussed in your written testimony, i am also reminded of statements that your immediate predecessor also discussed in his efforts to create a culture of