Despite “New” General Motor’s promises, the company looks exactly the same as “Old” General Motors. Federal safety regulators want to fine GM $7,000 a day for failure to respond to federal questions. GM CEO Mary Barra promised new standards and then answered every other question with “We’re still investigating.” Sen. Kelly Ayotte gave the response that most of the victim’s families had on their minds: “I don’t see this as anything but criminal.”
To be sure, GM is breaking more laws than I can count, if not in letter, than in spirit. For instance, GM’s bankruptcy actually gets around the rule that only individuals can discharge their debts in bankruptcy. All that talk about “new” GM and “old” GM is not metaphor. GM was literally divided into two companies, General Motors LLC and Motors Liquidation. The bankruptcy allowed GM to escape liability for its civil suits by dumping all the claims into Motors Liquidation, a “company” which holds all of GM’s debts, but none of GM’s assets.
Criminal prosecution of GM would be counterproductive at best. Even if the Justice Department could prove that GM officials and employees were guilty “beyond a reasonable doubt,” the only remedy would be lengthy prison sentences. For the families of the victims, that might be sufficient vindication of their loss. In many cases, punishment of the wrongdoer has to be enough. I think we can do better in this case though.
GM hired Kenneth Feinberg before the Congressional hearings. Feinberg is the attorney who set up compensation funds for 9/11 victims, BP Oil Spill victims, and the Boston Marathon Bombing victims. Hiring Feinberg was probably the smartest thing GM, old or new, has ever done. During the Congressional hearing though, CEO Barra reframed from promising victims a compensation fund.
That was the wrong move. The victims deserve a compensation fund, but they deserve more than money. GM engineers should repair the victims’ cars, free of charge, if the victims need car repairs. GM executives should help the children who lost their parents by training the children in business, accounting, or law if the children want to go into those fields. GM insiders should personally make amends to the families they have wronged.
These proposals are radical. They replace lost family members with GM employees and wrongdoers would be active participants in the lives of their victims. There is no judge in the country who would order these types of relationships. However, creating a support network for the auto accident victims would be a more moral solution than simply throwing GM employees in jail. Prosecutors have the discretion and the ability to craft a deal where GM insiders could help heal the victims they injured.