The group created by President Barack Obama to restructure a bankrupt General Motors in 2009 “definitely” had no idea about the ongoing problems with ignition switches, a former member of the White House’s auto task force told CNBC on Tuesday.
Years later, those switches became linked to at least 13 deaths and the focal point of a massive recall.
“Had we known about it, obviously we would have done something about,” MAEVA Group CEO Harry Wilson told “Squawk Box.” “Secondly, we didn’t get to that level of detail. … It’s something that GM engineers didn’t know about so it’s not something that would have bubbled up to us.”
GM CEO Marry Barra testifies before the House Energy and Commerce Committee on Tuesday afternoon about the company’s internal investigation as lawmakers probe the recall. Last week, GM expanded the recall to 2.6 million cars. The faulty ignition switches caused problems with airbags, power brakes and steering.
During an appearance on “Squawk Box,” a member of the committee, Rep. Michael Burgess, R-Texas, focused his criticism toward the National Highway Traffic Safety Administration, which he said should have investigated the switches when airbag problems surfaced in 2009 following a fatal accident.
Asked whether higher-ups at GM knew of the problems earlier than believed, Burgess said: “There does appear to be that sentiment. You don’t really know how far up the chain the decision was made. Was this simply something that occurred at the level of the engineers, or were executives of the company involved? I don’t really know.”
Wilson told CNBC he believes knowledge about the problems likely never rose above whoever replaced the faulty ignition switches without alerting supervisors and without issuing a new identification number years before the problems became public.
“It seems a decision was made to not issue a new replacement part number at the time the replacement part was made,” WIlson said. “Someone made that decision, which was highly unusual. I suspect whoever made that decision is where it stopped. Because that person didn’t go higher than that. At least we certainly hope that will be the case.”
Despite all the negative attention on GM, Yale School of Management’s Jeffrey Sonnenfeld praised Barra’s leadership.
“She’s shown a remarkable way to actually show genuine concern and contrition,” Sonnenfeld said on “Squawk Box.” “Many times these CEOs get ‘overlawyered ‘or overprotected. She’s right out there.”
Sonnenfeld said Barra’s job should revolve around rebuilding her company’s image and trust, despite potential challenges to its post-bankruptcy liability status.
The GM bankruptcy complicates the victim’s legal options. Wilson said the new GM that emerged from bankruptcy and government control is not liable for issues that happened before declaring bankruptcy. A collection of cash and assets are all that’s left of the old GM, he said.
Still, the new GM must decide how to approach the issue from a consumer standpoint and to rebuild its brand, Wilson added.
“The real question becomes … what’s the right thing for GM to do?” Wilson said.
—Reuters contributed to this report.