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‘Incompetence and neglect’ at GM over recall crisis

Troubled water: GM CEO Mary Barra described the internal investigation into the ignition switch recall crisis as “extremely thorough, brutally tough and deeply troubling”.

GM dismisses 15 employees as ‘deeply troubling’ report on recall crisis emerges

6 Jun 2014

GENERAL Motors has vowed to act on all recommendations of an internal investigation into the ignition switch recall crisis in North America affecting around 2.6 million small cars and reportedly linked to 13 deaths.

It has dismissed 15 employees “who were determined to have acted inappropriately” and disciplined five others over the ignition switch problem, which affected the safe operation of the car’s airbag systems – and which GM has known about for more than a decade.

The company has also confirmed plans to set up a compensation fund for people affected by crashes involving “recently recalled” vehicles with a faulty ignition switch, although details are still to be finalised.

Addressing employees overnight at the company’s engineering centre in Warren, Michigan, GM chief executive Mary Barra admitted that the internal probe by former US Attorney Anton Valukas had uncovered “a pattern of incompetence and neglect”.

The report found that company management’s inability to address the ignition switch problem, which persisted for more than 11 years with the Chevrolet Cobalt and a variety of other models, “represents a history of failures” and that while everyone who was engaged on the issue had a responsibility to fix it, “nobody took responsibility”.

The problem was found to have been misdiagnosed “from the beginning” and that experienced engineers, with responsibility for safety, “didn’t understand that the airbags would not deploy if the ignition switch changed position”.

Mr Valukas discovered that, over the entire period, there was no demonstrated sense of urgency “right to the very end” and that nobody raised the problem to the highest levels of the company despite engineers, investigators and lawyers all having been involved.

He also found “a pattern of management deficiencies and misjudgements – often based on incomplete data – that were passed off at the time as business as usual”.

Overall, the report concludes that “from start to finish, the Cobalt saga was riddled with failures, which led to tragic results for many”.

In her address, Ms Barra noted that the report revealed no conspiracy by the company to cover up the facts and no evidence that any employee made a trade-off between safety and cost.

However, the report cites numerous instances of employees making decisions that ultimately led to those “tragic results”, while service bulletins sent to dealers were carefully worded to avoid attracting the attention of federal safety regulators.

“Repeatedly, individuals failed to disclose critical pieces of information that could have fundamentally changed the lives of those impacted by a faulty ignition switch,” Ms Barra said.

“If this information had been disclosed, I believe in my heart the company would have dealt with this matter appropriately.

“Furthermore, numerous individuals did not accept any responsibility to drive our organisation to understand what was truly happening. The report highlights a company that operated in silos, with a number of individuals seemingly looking for reasons not to act, instead of finding ways to protect our customers.

“Because of the actions of a few people, and the willingness of others in the company to condone bureaucratic processes that avoided accountability, we let these customers down.” Ms Barra described the report as “extremely thorough, brutally tough and deeply troubling”.

“For those of us who have dedicated our lives to this company, it is enormously painful to have our shortcomings laid out so vividly,” she said.

“But this isn’t about our feelings or our egos. This is about our responsibility to act with integrity, honour and a commitment to excellence.

“This recall issue isn’t merely an engineering or manufacturing or legal problem, it represents a fundamental failure to meet the basic needs of these customers.

“Our job is clear: to build high quality, safe vehicles. In this case with these vehicles, we didn’t do our job. We failed these customers. We must face up to it and learn from it.

“To that end, on behalf of GM, we pledge that we will use the findings and recommendations from this report as a template for strengthening our company.” GM chairman Tim Solso said the board of directors was working closely with the management team “to get the facts on the ignition switch issue and to see that changes are made to prevent such a tragedy from ever happening again”.

He said the board would also establish a stand-alone risk committee “to assist in overseeing these efforts”.

As GoAuto has reported, GM has made a number of moves in recent months to improve its operations and restore public confidence in the wake of the ignition switch crisis.

It has issued recalls for many millions more vehicles across the globe for various unrelated safety issues, restructured its global vehicle engineering division, created a new vice-president of safety for the company (Jeff Boyer), hired 35 safety investigators and instituted a ‘speak up for safety’ program for employees.

GM top brass is also now involved in key safety-related decisions, whereas previously this was left to lower-level management.

Mr Valukas is chairman of law firm Jenner & Block and rose to prominence when appointed by the US justice department to examine the downfall of Lehman Brothers Holdings.

Administering GM’s compensation fund will be Kenneth Feinberg, the lawyer involved in victim compensation in the 9/11 attacks and Boston Marathon bombings.

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