GM chief blames culture of neglect for deadly failure

The Times, Alexandra Frean, 6 June 2014.

General Motors has dismissed 15 staff, disciplined five others and blamed a “pattern of incompetence and neglect” over more than a decade for an ignition switch failure in its Cobalt cars that led to at least 13 deaths.

In a brutally honest speech to about 1,000 employees in Michigan, Mary Barra, the chief executive, said that it was vital to “do the right thing”. She said that the company would compensate victims and their families and change its procedures and culture.

“This is not just another business crisis for GM,” she said. “I never want to put this behind us. I want to keep this painful experience permanently in our collective memories . . . because I never want this to happen again.”

Ms Barra, a former engineer, told employees to bring any safety concerns straight to her if they did not trust their supervisors.

Outlining the findings of an investigation by Anton Valukas, a former US attorney, into the faulty switch and the failure to act upon it for more than a decade, Ms Barra said that GM “operated in silos, with a number of individuals seemingly looking for reasons not to act, instead of finding ways to protect our customers.”

She said that individuals repeatedly “failed to disclose critical pieces of information” that could have enabled the company to respond properly to the problems with the ignition switches, which were first noticed in 2001. The fault caused engines to stall, shutting off both the power steering and airbags. A congressional panel investigating the issue revealed in April that the company changed the ignition switch in 2006 but did not change its part number, effectively masking the fix and making it harder for crash experts to identify the cause of the problem.

Ms Barra said that more than half of the 15 individuals dismissed were “senior executives . . . going into the top levels of the company”. They includes Ray DeGiorgio, the engineer who signed off on the change in the flawed part without changing its number, and Gary Altman, a programme engineering manager.

Mr Valukas’s report confirmed Ms Barra’s claim that she was unaware of the flawed switch until after she took over as chief executive last December. It suggested that the company initially failed to address the design flaw because it was regarded as a customer satisfaction issue, rather than safety. It also failed to link the stalling engines with the failure of airbags to deploy.

The company is opening a compensation plan to be run by Ken Feinberg, who handled compensation for 9/11 and the BP oil spill, for the families of those who lost their lives as a result of the problem and those who were seriously injured. The fund will start accepting claims in August. Although GM estimates that 13 deaths were associated with the faulty switch, lawyers for victims’ families say the real number is higher.

Michelle Krebs, an analyst at AutoTrader, said that Ms Barr’s speech had served not just to reassure GM customers, but also to rally employees. “This was her Pearl Harbour moment and she pulled it off. The fact that she said, ‘I don’t want us to forget this’, was really important,” Ms Krebs said.


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