GM hires Kenneth Feinberg to consult recall effort

April 2, 2014, 12:45 AM UTC

General Motors (GM) has hired Kenneth Feinberg, the high-profile attorney who handled compensation issues related to the 9/11 terrorist attacks and the BP oil spill in the Gulf of Mexico, as a consultant to advise the automaker how to respond to families of accident victims whose vehicles are being recalled for possible ignition switch defects.

GM CEO Mary Barra announced that the company had retained Feinberg during her testimony before the House Subcommittee on Oversight and Investigations hearing today. The point of the hearing is to review the ignition switch recall and why it took GM nearly 10 years to reveal an ignition switch problem that has been linked to at least 13 deaths.

Feinberg has “extensive experience and he will assess what the next step should be,” Barra said during the hearing.

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Feinberg is scheduled to meet with GM executives Friday. Barra told legislators it will take 30 to 60 days for Feinberg to make his initial assessment.

Rep. Jan Schakowsky (D-Ill.) pressed Barra on whether it would take responsibility for those injured or killed while driving vehicles being recalled for ignition switch failure.

While Barra would not say GM took full responsibility for the deaths, she said the automaker recognizes “we have legal and moral responsibilities.”

Feinberg, who most recently advised on compensation issues related to the Boston Marathon bombing, has been mandated to consider the options for dealing with issues surrounding the ignition switch matter.

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GM has also hired former U.S. Attorney Anton Valukas to investigate its actions. The investigation by Valukas, who was appointed examiner in the bankruptcy of Lehman Brothers in 2009, is currently underway, Barra said.

While Barra said she is receiving updates from Valukas, she did not share any information on any initial findings during the hearing.

Earlier this week, GM announced a separate recall of 1.3 million vehicles in the U.S. over concerns they may experience a sudden loss of electric power steering. On Friday, GM extended its ignition switch recall by another 824,000 vehicles to cover all model years of the Chevrolet Cobalt and HHR, Pontiac G5 and Solstice, and the Saturn Ion and Sky in the U.S. because faulty switches may have been used. In all, the ignition switch recall affects 2.19 million vehicles in the United States.

GM also announced Monday that it has more than doubled its first-quarter charge to $750 million to cover the cost of recall-related repairs. This amount includes a previously disclosed $300 million charge for three safety actions announced March 17 and the ignition switch recall announced Feb. 25.

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GM’s total number of recalled vehicles in the U.S., including the power steering issue, ignition switch, and three other safety issues, has now surpassed 5 million.