In the midst of U.S. House Representatives bombarding General Motors chief executive officer Mary Barra and former U.S. Attorney Anton Valukas with questions for more than two hours on Wednesday, one lawmaker wondered about the status of what he believed to be a key cog in rectifying older vehicles with faulty ignition switches — franchised dealers assigned to make repairs.

Rep. Michael Burgess of Texas — whose district includes the cities of Denton, Lewisville and Keller, all of which are northwest of Dallas — asked this question during the hearing hosted by the House Energy and Commerce Committee: “How are your dealers holding up under what must be a massive onslaught of people needing their cars fixed?”

Barra replied with a glowing assessment of the franchised dealers who have already repaired more than 100,000 vehicles with new ignitions.

“Our dealers are doing a tremendous job in terms of supporting the customer. We have many dealers who are reaching out. We had one dealer who had a customer who was several miles away. Their daughter had the vehicle and there wasn’t a dealership close by. The dealer went back and forth and got the vehicle and got the repair made,” Barra said.

“I can’t be more proud of how our dealers are supporting the customer,” she continued.

Burgess recalled that he was on this same committee when Toyota officials came to Capitol Hill to answer questions about recalls associated with unintended acceleration. He mentioned during that turbulent time five years ago, Toyota stores in his district extended service department hours to handle the extra work the campaigns created. Barra told Burgess and the rest of the committee that she’s spoken to hundreds of GM dealers who have extended hours of their service departments, too.

“The problem is getting the customer to come in and get the vehicle repaired. That’s why we’ve employed a lot of innovative ways to do that. That’s why the dealers are reaching out,” Barra said.

“We’ve done research to figure out which messages would be most compelling to have these individuals come in to have their vehicles fixed,” she continued. “The dealers are working to do specific arrangements with each individual to make it as convenient as possible to reduce the inconvenience.”

Burgess was one of the few lawmakers to bring up the dealer’s role in the situation. Most committee members chose to focus on the Valukas report and how GM plans to compensate families who have experienced loss as a result of these faulty vehicles.

Rep. Fred Upton, the House Energy and Commerce Oversight and Investigations Subcommittee chairman, also wondered if the depth of ignition problems goes well beyond the recall of the Chevrolet Cobalt and other discontinued models. Upton referenced the recall GM made earlier this week so the automaker can rework or replace ignition keys on about 3.16 million vehicles in the U.S. from the 2000 through 2014 model years.

The reason is because the ignition switch may inadvertently move out of the “run” position if the key is carrying extra weight and experiences some jarring event.

“To reiterate, nearly nine years ago, a GM employee suggested the stalling of a 2006 Impala was a serious safety problem and speculated that a ‘big recall’ was coming. So when was the recall for the ’06 Impala announced? … Two days ago, Monday,” Upton said.

“The recall announced on Monday makes it painfully clear this is not just a Cobalt problem,” Upton continued. “A culture that allowed safety problems to fester for years will be hard to change. But if GM is going to recover and regain the public’s trust, it must learn from this report and break the patterns that led to this unimaginable systemic breakdown.”

Industry Reaction

After watching Wednesday’s proceedings, Kelley Blue Book senior analyst Alec Gutierrez stressed that Barra has instituted significant changes at GM following the release of the Valukas report and her first appearance in front of Congress on April 1. Gutierrez noted the hiring of 35 safety investigators, the firing of 15 employees directly related to the issue among other actions.

During her second appearance in front of Congressional lawmakers, it was clear that while Mary Barra and GM are now doing and saying the right things, this issue is far from over and there remains many unanswered questions,” Gutierrez said. “Although this remains a serious issue for GM, the automaker will receive close scrutiny for some time to come, and consumer demand for GM products has remained quite strong.  In fact, GM saw sales grow by more than 12 percent year-over-year in the month of May alone, outpacing growth in overall industry sales. 

“Consumers have demonstrated that recalls do not factor as heavily into their purchase decision process, as we in the industry might seem to think,” he continued. “With GM’s reputation under the microscope as it tries to navigate the most serious safety crisis in its history and with more than 14 million vehicles recalled so far this year, GM remains the largest automaker in the U.S. and continues to enjoy healthy growth in the U.S. auto sector. 

“Car shoppers are clearly distinguishing a difference between ‘new’ and ‘old’ GM, and we expect to see GM maintain stability in the marketplace provided that it remains proactive and on top of this very serious issue,” he went on to say.

In a message to Auto Remarekting, Gutierrez also touched on GM’s residual values, which KBB said are performing in line with the industry while showing no excess depreciation related to the recalls.

KBB also determined 1- to 3-year-old auction values of GM vehicles (model year 2011 to model year 2013) are currently 4.3 percent higher than they were at this time last year, adjusting for age and mileage.

“The overall industry, not including GM, is up 4.2 percent, indicating that GM is not showing any adverse impact related to the recalls at wholesale auctions,” Gutierrez said. “Auctions are a great indicator of what both consumers and dealers are willing to pay for these vehicles, since dealers will be likely to cut prices as consumer demand drops. 

“With auction values holding steady, it appears as though consumer demand has not dropped significantly, which is why GM cars are still trending well relative to the rest of the industry,” he added.