General Motors

General Motors (GM) is a US carmaker that was the world’s biggest, although Toyota is challenging it for the title. It was hard hit by the global financial crisis, needing a government bailout, but emerged from chapter 11 reorganisation in 2009, and held an initial public offering in 2010. It returned to profit in 2011.

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GM's top brass spared as carmaker sacks 15 after report on safety scandal

Ignition switch fault that led to at least 13 deaths ignored for 11 years until recall in February

PUBLISHED : Friday, 06 June, 2014, 11:50am
UPDATED : Saturday, 07 June, 2014, 1:37am

General Motors issued a report on Thursday detailing how for 11 years it turned a blind eye to an ignition-switch problem linked to at least 13 deaths.

The carmaker largely pinned the blame on what the report described as incompetent lower-level employees, leaving top brass untouched.

The report, which will be the subject of upcoming US congressional hearings, describes shortcomings of GM engineers, including a failure to understand "how the car was built". Meanwhile, it said, the highest levels of the company were not made aware.

Providing a rare peek into the operations of one of the world's biggest carmakers, the internal investigation said GM had a long-running corporate culture in which nobody took responsibility for problems.

The "GM nod" was how chief executive Mary Barra described that culture, "when everyone nods in agreement to a proposed plan of action, but then leaves the room and does nothing", the document said.

In February, GM finally began recalling vehicles for repairs. So far, 2.6 million vehicles have been identified. This recall, coupled with others announced by GM this year, has cost the company about US$1.7 billion so far.

By 2011, three years before the recalls began, outside lawyers were warning GM's in-house counsel that they needed to act, the report said.

Barra said 15 employees found to have "acted inappropriately" have been fired. She did not name all the individuals, but said more than half of them had been in senior or executive roles.

During April congressional hearings, Barra was unable to answer many questions, saying the internal investigation would find answers.

But at Thursday's news conference, she still left some questions unanswered, including why GM redesigned the flawed ignition switch but failed to follow the normal procedure of assigning a new part number. That has led some critics to believe someone was covering up the change.

Since early this year, the Detroit carmaker has been enveloped in a scandal over why it took more than a decade to begin recalling low-cost Chevrolet Cobalts, Saturn Ions and other cars with ignition-switch problems that were causing them to stall during operation.

Because of the engine stalls, air bags failed to deploy during crashes - some of them fatal - and drivers had difficulty operating their vehicles. because power steering and brake systems also malfunctioned.

GM "heard over and over from various quarters, including customers, dealers, the press and their own employees, that the car's ignition switch led to moving stalls", but employees "failed to take action or acted too slowly", the report said.

The move to spare the highest executives from blame drew some sharp criticism.

"How do you truly fix a culture of carelessness and cover-up without cutting the head off the snake?" said Robert Hilliard, a lawyer for a plaintiff in a lawsuit against GM related to the ignition-switch defect.

While Barra noted a pattern of "incompetence and neglect" by individuals who failed to "disclose critical pieces of information", she said there was "no conspiracy … to cover up facts".

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