Michael Millikin, general counsel of General Motors Co., told skeptical senators on Thursday that he was “deeply sorry” for his legal department’s handling of an ignition-switch defect and was working to make sure a similar scandal doesn’t happen again.
Millikin, in his first testimony under oath before lawmakers investigating GM, said he and his colleagues at the company are “committed to setting a new industry standard for safety, quality and excellence.”
Members of the Senate Commerce, Science and Transportation Committee’s consumer protection, product safety and insurance subcommittee grilled Millikin about why his legal department failed to report problems with the switch. The department’s handling of the defect was detailed in a highly critical GM report released in June.
“How in the world in the aftermath of this report did Michael Millikin keep his job?” asked Sen. Claire McCaskill, D-Mo., the subcommittee’s chairwoman. “I do not understand how the general counsel for a litigation department that had this massive failure of responsibility, how he would be allowed to continue in that important leadership role in this company.”
Chief executive officer Mary Barra told the committee she stands behind Millikin, who became GM’s top lawyer in 2009 after more than 30 years at the company.
“Mike Millikin is a man of incredibly high integrity,” Barra said. “He has tremendous global experience as it relates to the legal profession. He’s the person I need on this team. He had a system in place. Unfortunately, in this instance, it wasn’t brought to his attention.”
GM this year has recalled 2.6 million vehicles for faulty switches that the company has tied to 13 deaths. The company has created a fund to compensate victims and a federal judge is considering whether it committed a fraud on the court by concealing the defect during its 2009 bankruptcy.
Millikin said the company has purged itself of in-house counsel who “did not do their jobs; didn’t do what was expected of them.” Now the company has in-house lawyers who are “hardworking, dedicated professionals of the highest integrity,” he said.
“They have expressed sincere and deep disappointment and 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,” Millikin said. “The GM legal staff is dedicated to helping GM become the leader in automotive safety.”
GM’s report criticized how its employees, including in-house counsel, responded to a defect that customers had identified for a decade. The automaker first notified the U.S. National Highway Traffic Safety Administration about the problem in February.
By 2011, outside lawyers with knowledge of GM engineers’ data had repeatedly warned in-house counsel that the company could face accusations of “egregious conduct due to its failure to address” the safety issue and face punitive damages, according to the report. Millikin, however, wasn’t named as one of those in-house lawyers. He said he didn’t know about the problem until February.
At least four senior in-house counsel reportedly were among the 15 GM employees who lost their jobs. They included Michael Robinson, vice president for environmental, sustainability and regulatory affairs; Lawrence Buonomo, administrative head of product litigation; William Kemp, counsel for GM’s global engineering organization; and Jennifer Sevigny, an attorney who led GM’s field product assessment group.
The report was written by former U.S. attorney and Jenner & Block chairman Anton Valukas, who appeared with Millikin and Barra on Thursday. It contains two pages of suggestions for GM’s legal department, including that in-house attorneys provide “specific guidance concerning the types of issues that should be elevated to the general counsel” and that a member of the legal staff serve as a liaison with the automaker’s global vehicle-safety organization.
Millikin said he takes the recommendations seriously.
“I am assuring the implementation of each and every recommendation, and I have made and will continue to make other changes to help improve,” he said.
During the hearing, Barra also faced questions from Sen. Richard Blumenthal, D-Conn., about why the compensation program only covers individuals injured or killed due to switch defects in 2.6 million vehicles when another 8.2 million cars with switch problems were recalled, too.
Contrary to its response to the problems in the 2.6 million vehicles, GM worked “aggressively and proactively” to address the defects with the 8.2 million cars, Barra said.
“There’s very different facts related to what happened in the [2.6 million-vehicle] situation,” she said.
Plaintiffs attorney Jere Beasley, who represents the family of a woman killed in a crash tied to the faulty switch, said in a written statement that the Senate hearing was “beneficial.” The testimony from the GM officials, he said, made him “more convinced than ever” that the automaker intentionally covered up the problem.
“No reasonable person should believe that only a few engineers and lawyers were responsible for conduct that is as bad as I have seen during my 35 years of handling product liability litigation,” said Beasley, founding shareholder of Beasley, Allen, Crow, Methvin, Portis & Miles. “If GM operated in the manner described before the Congressional committees, and as found by the so-called independent investigation paid for by GM, then the automaker needs to clean house and bring in new blood—men and women who will do more than talk about bringing about a new safety culture, and truly make safety a reality at the company.”
Contact Andrew Ramonas at firstname.lastname@example.org.