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GM fires engineers, executives after ignition switch recall probe

Thu, 05 Jun 2014

Update: New story containing new information, additional details of terminations added.

General Motors has dismissed 15 employees, including at least eight executives, after an internal investigation found “a pattern of incompetence and neglect” that led to 11 years of delays in recalling millions of cars for a fatal defect, CEO Mary Barra said today.

Barra promised that the company would address future safety issues far differently, warning employees that failing to report risks would make them “part of the problem” and even inviting them to contact her directly if they couldn't get potential defects addressed themselves.

She said the report by former federal prosecutor Anton Valukas found no evidence of an intentional cover-up or that “any employee made a tradeoff between safety and cost,” concluding that employees initially believed it to be a customer-satisfaction issue rather than one that could lead to crashes or deaths.

Barra said GM plans to set up a compensation fund for people affected by crashes related to the ignition switch, though details about the plan have not been finalized yet.

New committee

GM Chairman Tim Solso said in a statement today that the board of directors will create a stand-alone committee to oversee “risk-management” issues. He also said the report concluded that Barra, President Dan Ammann and global product-development chief Mark Reuss did not learn of the ignition switch matter until December, shortly before the decision was made to issue a recall.

During a meeting with GM employees that was broadcast online, Barra called the report by former federal prosecutor Anton Valukas “extremely thorough, brutally tough and deeply troubling.” She said engineers and others who learned of problems with ignition switches as early as 2003 “misdiagnosed the problem from the very beginning” and failed to treat it with the appropriate level of urgency.

Barra did not identify the employees who were fired or resigned. Two engineers who had been suspended with pay since April 10 -- Ray DeGiorgio, who designed the ignition switch, and Gary Altman, the program engineering manager for the Chevrolet Cobalt -- are among them, people familiar with the matter told Automotive News. Neither DeGiorgio nor Altman have commented publicly on their situations.

Barra said most or all of the dismissed employees worked in the engineering, legal, public policy and quality departments and that more than half were senior-level executives. Five additional employees have been disciplined, she said.

“From start to finish, the Cobalt saga was riddled with failure, which led to tragic results for many,” Barra said.

GM's general counsel, Mike Millikin, who helped lead the investigation, is staying with the automaker, Barra said. GM says it has linked 13 deaths and 47 crashes to the defective switches. Lawyers and safety advocates contend that the death and injury toll is far higher.

Paying fine

GM in May admitted breaking federal law and agreed to pay a $35 million fine levied by NHTSA. It also has to meet with NHTSA officials monthly to discuss potential safety issues and implementation of the changes recommended by Valukas' report.

Bob Lutz, the former GM vice chairman who headed product development, said last night during a dinner event at Eastern Michigan University that high turnover and lack of communication in the company caused the faulty ignition switches to go unnoticed.

Lutz said each department in the company knew small aspects of the problem, but employees never came together to look at the big picture.

Nora Naughton contributed to this report.

GM expected to dismiss multiple employees as internal probe is released originally appeared on Automotive News.

By Nick Bunkley and Mike Colias- Automotive news