GM cites 'pattern of incompetence,' fires 15 including legal execs, will pay ignition-switch victims
An internal probe of General Motors found “a pattern of incompetence and neglect” but no intentional cover-up of ignition-switch issues that resulted in a massive vehicle recall this year after a decade of problems including at least 13 fatal accidents.
Fifteen employees were fired as a result of the investigation led by Anton Valukas of Jenner & Block. GM announced that the company will create a compensation fund for the victims of the defect, which involved small cars such as the Chevrolet Cobalt and Saturn Ion. By slipping out of position if jostled or weighted by other keys, a faulty ignition switch can shut down the engine, disable a vehicle’s airbags, power-assisted steering and brakes and cause a driver to lose control. The company says 13 deaths have resulted; plaintiffs’ lawyers say the actual number is more like 60. Many more were injured.
The Associated Press, Fox News, the Detroit Free Press, the New York Times (reg. req.), USA Today and the Wall Street Journal (sub. req.).have stories.
Chief executive Mary Barra said those axed included a number of senior legal and engineering executives. Another five employees were disciplined. None was identified, except for two engineers, one of whom authorized an ignition-switch redesign, according to news reports.
“Repeatedly, individuals failed to disclose critical pieces of information that could have fundamentally changed the lives of those impacted by a faulty ignition switch,” Barra said during a Thursday town hall meeting with company employees in the company’s technical center in suburban Detroit. “If this information had been disclosed, I believe in my heart the company would have dealt with this matter appropriately.”
The company now has a global safety chief and Barra urged workers to report problems to their supervisors–and, if they are not satisfied with the response, to her directly.
“The ignition-switch issue was touched by numerous parties at GM–engineers, investigators, lawyers–but nobody raised the problem to the highest levels of the company,” she said.
Details of the compensation fund have not yet been revealed. The Valukas report hasn’t been released, but GM has provided it to the National Highway Traffic Safety Administration and the agency is expected to make the report public later in the day.
ABAJournal.com: “GM seeks bankruptcy court ban on class actions alleging lost value due to car ignition-switch issues”
ABAJournal.com: “GM to pay record $35M civil penalty for delayed action on faulty ignition switches”
ABAJournal.com: “GM’s legal department is reportedly scrutinized in internal probe”
CNN Money: “How Brooke Melton’s death led to the GM recall”