By Jeffrey McCracken and Tiffany Kary, Bloomberg News
NEW YORK (April 4, 2014) — The task force President Barack Obama set up to manage General Motors' bailout and bankruptcy in 2009 wasn't aware of the faulty ignition switches linked to 13 deaths in small cars, people familiar with the matter told Bloomberg.
Had it come up, the task force would have considered setting aside more money for the GM estate left behind after the auto maker filed for bankruptcy in June 2009, said the people, who asked not to be named because their meetings were confidential. At the time, GM's board and the task force based their projections for product-liability claims on a report that the GM estate would face about $414 million for pre-bankruptcy crashes, according to court papers.
While members of the task force met frequently in early 2009 with GM executives to discuss product-liability claims and determine how they should be handled in bankruptcy, the ignition switches or safety problems with the Chevrolet Cobalt weren't brought up, said the people.
GM CEO Mary Barra is confronting the company's biggest crisis since the bankruptcy as lawmakers seek to find out who knew what and when, and what actions GM should have taken to probe and repair a flaw that has prompted the recall of 2.59 million small cars. The recall includes the 2005-2007 Cobalt, 2007 Pontiac G5 and 2003-2007 Saturn Ion.
‘Significant leverage'
At the time of the bankruptcy — as GM sought to transfer assets to a new company while leaving liabilities behind — the task force had “significant leverage” and made the final decisions, according to a 2013 report by a special inspector general for the Troubled Asset Relief Program (TARP).
Steven Rattner, who headed the task force for the Obama administration, declined to comment on the matter when reached by phone April 2. A GM spokesman didn't have an immediate comment.
