GM CEO Admits Company Flubbed Fatal Ignition Flaw

General Motors Co. failed to designate a flawed ignition switch linked to multiple deaths and injuries as a safety concern, Chief Executive Officer Mary Barra told jurors at a Texas trial.

GM engineers in 2004 and 2005 “misdiagnosed it as a customer satisfaction issue and not a safety issue,” Barra said in a video deposition given last year and played at trial Monday by lawyers for the plaintiff.

“A series of mistakes were made over a period of time that caused the ignition-switch defect,” Barra testified. “This had tragic consequences.”

Barra’s video testimony, clipped from a previously unseen deposition taken for multiple lawsuits, is the CEO’s first to jurors weighing the company’s liability to accident victims allegedly harmed by faulty ignition switches GM knowingly put in cars for years. The deposition wasn’t played in either of the first two trials over the switch, both won by GM.

GM recalled 2.6 million vehicles with the flawed switches which, if jostled, can unexpectedly shift into the off position. Once power is switched off, vehicle safety systems — such as power steering, power brakes, airbags and seatbelt pretensioners –- no longer function as designed.

A Houston family claims one of these defective switches caused a fatal car crash in 2011, which resulted in then-19-year-old Zachary Stevens being charged with manslaughter for the death of the other driver. That charge was dismissed because the accident involved a recalled car, his lawyer told jurors last week.

Stevens seeks compensation for lingering brain injuries and the cost of defending his criminal prosecution. By classifying the flaw as a customer-satisfaction problem and not a safety defect, GM avoided having to notify regulators and the public of the defect and recall millions of cars for repairs, his lawyer said in trial last week.

GM claims the flawed ignition switch had nothing to do with Stevens’s crash, which company lawyers told jurors on Aug. 9 was caused by the teenager’s reckless speeding on a rain-slicked country road. GM has argued in trial that the reason for the dropped prosecution isn’t known.

Barra took the top job at GM in January 2014, three weeks before the ignition-switch scandal made headlines around the globe. She testified four times before Congressional committees that year, drawing praise for her candor and commitment to changing what lawmakers criticized as GM’s “culture of secrecy.”

Hundreds of lawsuits remain, with more than a dozen set for trial in the next 12 months, according to court records. The next trial begins September 12 in federal court in New York, brought over a 2011 crash of a Cobalt in Virginia. The judge overseeing the Stevens case dismissed another trial also set for September, saying Monday that there wasn’t enough evidence to link the ignition switch flaws to that accident.

Barra was asked in the deposition about the “statement of facts,” a legal document that spells out GM’s admissions that accompanied the company’s settlement of the federal criminal investigation. While jurors have been told of the settlement, they’ve not been advised that it was a criminal case.

Barra read several passages of the statement of facts to the jury, that GM engineers knew of the defect but hid it from the public and kept installing the defective parts in new cars. “From in or about the spring of 2012 through in or about February 2014, GM failed to disclose a deadly safety defect to its U.S. regulator, the National Highway Traffic Safety Administration,” she read.

When pressed on whether GM intentionally hid a deadly flaw from regulators and customers, she replied: “I support and stand by the statement of facts.” She said the ignition-switch defect “could cause frontal airbag non-deployment, and certainly if the airbag doesn’t work, it could cause a problem that could cause a fatality.”

GM won the first two ignition cases to reach trial, one when a federal jury in New York blamed a New Orleans crash on a freak ice storm, rather than a faulty ignition switch. The company’s other victory came before a jury could make a decision when the plaintiffs folded after being caught lying on the stand.

The defect has been linked to at least 124 deaths and an additional 275 injuries. General Motors has paid at least $870 million to settle about 1,800 death and injury claims and an additional $900 million to the Department of Justice to resolve a criminal investigation.

The case is Stevens v. General Motors, 2015-04442, District Court, Harris Co., Texas (Houston).