In the April 11, 1959 issue of The Nation, a young attorney named Ralph Nader took auto manufacturers to task for “glacier-like movement” in availing themselves of engineering solutions to minimize the deadly effects of car crashes. “Automobiles are so designed as to be dangerous at any speed,” he warned, testing out the line that evolved into the title of his groundbreaking 1965 book, Unsafe at Any Speed.
Fifty-five years later, Congress is investigating a new car safety scandal involving corporate malfeasance, regulatory ineptitude, and at least thirteen deaths. For more than a decade, General Motors was aware of an ignition switch defect that caused some cars to shut off, seemingly at random, disabling the power steering, the airbags, and other safety features. Not until February did GM begin to recall the affected models. The company has recalled more than 2.6 million vehicles so far, and is facing a congressional inquiry and a criminal probe. For it’s part, the National Highway Transportation Safety Administration, one of the most significant legacies of Nader’s campaign for consumer safety, appears to have failed to perform its oversight and enforcement duties, twice declining to investigate reports of the defects.
As GM CEO Mary Barra and NHTSA acting administrator David Friedman prepare to testify before Congress on Wednesday and Thursday, I spoke with Nader about the scandal, regulatory lapses, and the relationship between lawmakers and the auto industry.
The conversation has been edited for length and clarity.
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Zoë Carpenter: What do you think the GM scandal says about how far we’ve come to balance corporate power and consumer rights?
Ralph Nader: GM has done a lot of worse things and got away with it over the years. They blocked fuel efficiency standards with Michigan Representative John Dingell and others, they've blocked safety standards from NHTSA. However, this one has all the elements of a criminal cover-up. Criminal negligence at least, if not a pure criminal cover-up. As a result there is great potential for legislative reform to strengthen the antiquated motor vehicle and highways safety laws, bring them up to date, improve the recall authority, enlarge the fines, and increase the budget of NHTSA, which is absurdly low—deliberately low.
That's the problem with all of these regulatory agencies: almost nobody pays attention in the press to the tiny budgets. It's like having a street crime spree in New York City--arsons, burglary, assaults, and there's one hundred police. People would say, "You need more police!" Well, you need more federal cops in the corporate crime beat and that's true for all agencies. The corporate lawyers are very good about going up on Capitol Hill and making sure those budgets do not increase, even though they pay for themselves many times over with fines and penalties.
Is part of the problem the relationship between lawmakers and the auto industry?
Yeah! It's always been that way, and Dingell of course has undermined the Democrats. So you take the Republicans and John Dingell, you can't beat 'em. Dingell will bring in the United Auto Workers on fuel efficiency, for example. You can't beat a combination of GM, UAW, and John Dingell. He blocked the air bag for years. He was on the back of NHTSA all the time!
One problem is the trivial budgets [for regulatory agencies]. If you don't have investigators, prosecutors, other lawyers, engineers, you can't do justice to the safety laws. You just cannot keep up. Especially when the auto companies are expert at stonewalling you, giving money to lawmakers on the hill, hiring corporate law firms.
NHTSA is culpable in this GM ignition switch problem, for sure. They weren't alert enough, and there's a culture of timidity. It's a product of being browbeaten by Dingell, by the White House, by the lobbyists day after day, year after year, decade after decade. They get very squeamish about ordering recalls. Detroit has Washington pretty greased. They pick timid regulators who are engaged in on-the-job training and represent the auto industry after they leave the agencies.
Is this part of a larger problem with the revolving door in Washington?
Yeah, it's part of a larger problem.
You mentioned earlier that the GM case has the elements of a cover-up. What are some of the signs indicating that?
The first is they knew years ago about a deadly defect that could cause death and injury. Then they got reports of the deaths and injuries, and did nothing. Under law they were supposed to inform the government about it, and they did not do so. Then more deaths and injuries occurred, and they still did nothing. [General Motors CEO] Mary Barra says that she didn't learn about it until January 31! And she's the CEO. So the best view of what happened inside GM is bureaucracy—committees passing the buck to one another, nobody responsible, stifling whistleblowers.
This may well lead to an reorganization internally within GM. GM should put an independent ombudsman in place who can receive complaints from conscientious engineers early on, protect the anonymity of the engineer, and have direct access to the top executives of GM.
It's a great opportunity, actually. The only time the traffic and auto safety laws are strengthened is when there's a scandal. You've got the big enchilada here with GM.
And there's another thing: that GM might have released false information during this bankruptcy. They may unravel the bankruptcy again, and what we're pushing for is to reinstate all those liability suits by injured and dead people in GM cars. The bankruptcy created a new GM and an old GM. Old GM had no assets. New GM was filled with billions in taxpayer dollars and they immunized it from dozens and dozens of product liability lawsuits by families, which is really gross and unprecedented. And now that could be re-opened.
Here's what I think is going to happen: no auto company can continually be exposed day after day in the newspapers, because they're going to start losing credibility and start losing sales. So GM may enter into a grand settlement: they pay a huge fine to get the Justice Department and the Department of Transportation off their back, they recall all the cars, they allow the reinstatement of the liability suits, and they pledge that they'll reorganize inside GM, so that it doesn't happen again.
GM doesn’t want a criminal investigation. That would be devastating. Companies will do anything to avoid a trial. There are very few trials in the corporate crime area—shockingly few trials.
Notice that the auto safety law itself has no criminal penalty. We lost that battle in a huge struggle in the Senate back in 1966. Even for willful violation of NHTSA regulations, there is no criminal penalty. Where the criminal penalty comes in is in Title 18; if you lie to the government or do not report information as required to the government. So in one sense, GM is shielded by the absence of a criminal penalty under NHTSA. On the other hand, they are vulnerable under Title 18, because they didn’t report to NHTSA as they were required to, and they misled the agency.
A grand settlement along the lines you described, would that solve the problems with the regulatory agencies?
That’s a bigger challenge and that’s very important. It’s one thing to strengthen NHTSA, but if NHTSA is under a lot of political pressure from Dingell types and White House types it’s not going to mean that much. But it will mean something. No matter who’s president, no matter who’s on the Hill, if you doubled the recall authority of NHTSA, you’d get more recalls. You’ll still have political influence, but you’ll get more recalls, because there’d be more engineers and scientists.
Why all the attention now?
I think Mary Barra is a factor. They’re fascinated by this new woman, and how she’s going to handle it. That’s part of it. The second is that it’s such a simple thing to understand: don’t put anything on your keychain, otherwise you may lose your engine and your airbag will not deploy when you crash. It isn’t like it’s a complex handling problem or an engine problem or something like that.
The reason Congress is so interested in this is because of the media. Did you see The New York Times article saying the Cobalt was a “lemon?” GM can’t take that. It’s like a spilling sewer pipe. Once all this is in the press, other whistleblowers might start to emerge because they can get protective cover.
The media is racing on this. It’s just marvelous, after ten years of a news desert. Those of us in auto safety advocacy, we have to take advantage of this for reform—reform in NHTSA, and reform in the auto companies.
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