Traverse City Record-Eagle

Business

June 6, 2014

GM ousts 15 employees

WARREN (AP) — General Motors said Thursday it has forced out 15 employees for their role in the deadly ignition-switch scandal and will set up a compensation fund for crash victims, as an internal investigation blamed the debacle on engineering ignorance and bureaucratic dithering, not a deliberate cover-up.

GM took more than a decade to recall 2.6 million cars with bad switches that are now linked to at least 13 deaths by the automaker’s count.

“Group after group and committee after committee within GM that reviewed the issue failed to take action or acted too slowly,” Anton Valukas, the former federal prosecutor hired by the automaker to investigate the reason for the delay, said in a 315-page report. “Although everyone had responsibility to fix the problem, nobody took responsibility.”

GM CEO Mary Barra, who released the results of the investigation, said more than half the 15 employees forced out were senior legal and engineering executives who failed to disclose the defect. Five other employees have been disciplined, she said. She didn’t identify them.

The automaker said it will establish a compensation program covering those killed or seriously injured in the more than 50 accidents blamed on the switches. The amount available to be paid out was not disclosed.

The report lays bare a company that operated in “silos,” with employees who didn’t share information and didn’t take responsibility for problems or treat them with any urgency.

Valukas also portrays a corporate culture in which there was heavy pressure to keep costs down, a reluctance to report problems up the chain of command, a skittishness about putting safety concerns down on paper, and general bureaucratic resistance to change.

He describes what was known as the “GM nod,” in which “everyone nods in agreement to a proposed plan of action but then leaves the room and does nothing.”

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