WARREN, Mich. (AP) — General Motors said Thursday that 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 said more than half the 15 employees forced out were
senior legal and engineering executives who failed to disclose the
defect and were part of a "pattern of incompetence." Five other
employees have been disciplined, she said, without identifying any of
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. GM said not say how much money will be
involved, but a Wall Street analyst estimated the payouts will total
$1.5 billion.
Barra called the report "brutally tough and deeply troubling."
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 portrayed 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 on paper, and general bureaucratic
resistance to change.
He described 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."
Valukas exonerated Barra
and two other top executives, Mark Reuss, chief of global product
development, and general counsel Michael Millikin, saying there is no
evidence they knew about the problems any earlier than last December.
Since
February, GM has recalled 2.6 million older-model Chevrolet Cobalts,
Saturn Ions and other small cars because their ignitions can slip out of
the "run" position and shut off the engine. That disables the
power-assisted steering and brakes, making it difficult to control the
car, and deactivates the air bags.
Trial lawyers suing the company put the death toll at more than 60.
"It’s
somewhat comforting to realize that they do know that some things were
done incorrectly and they’re aware of that. They made the appropriate
measures to make sure it doesn’t happen again," said Ken Rimer, whose
18-year-old stepdaughter, Natasha Weigel, was killed in a 2006 Cobalt
crash in Wisconsin.
Last month, GM paid a record $35 million fine
for failing to promptly report the bad ignition switches to federal
highway safety regulators. Federal prosecutors are also investigating
and could bring criminal charges against the automaker and some of its
employees.
Deep within the company, engineers and others believed
the ignition switch flaw was a "customer convenience" issue rather than a
safety problem, the report said. Engineers believed that the cars could
still be adequately steered when the engines shut off, and they didn’t
realize the air bags became disabled — even after police, academic
experts and others outside GM had recognized the problem, according to
the report.
Around GM, engineers were instructed not to use words
like "dangerous," ”defect" or "safety" when describing problems in
writing, which contributed to the lack of urgency in dealing with the
problem, Valukas wrote. In addition, some workers told Valukas they did
not take notes at safety meetings because they believed GM lawyers
didn’t want a paper trail.
In 2005, according to documents
supplied recently to Congress, GM failed to make a repair of the switch
that would have cost just 57 cents.
In his report, Valukas said he
found no evidence that any employee made "an explicit trade-off between
safety and cost" in dealing with the switch. But he said there was
"tremendous cost pressure" at GM at the time, and he left open the
possibility that it influenced the automaker’s handling of the problem.
The
report could hurt GM in legal proceedings and complicate matters for
lawyer Kenneth Feinberg, the compensation expert hired by GM to settle
some of the many lawsuits, said Carl Tobias, a law professor and product
liability specialist at the University of Richmond in Virginia.
But
plaintiffs’ lawyers already know most of what’s in the report from
depositions in previous cases, and Valukas was "careful not to open too
much liability exposure," Tobias said.
Under a judge’s order, GM
is shielded from legal claims from before it emerged from bankruptcy in
2009, and company officials wouldn’t say Thursday whether they will use
that protection against death and injury lawsuits. Lawyers are trying to
overturn the shield, alleging GM deceived the judge.
Barra, who
took over as CEO in mid-January, didn’t directly answer a question about
whether she should have figured out the switches were a deadly problem.
Before the took the top job, she was product development chief for
three years, and safety reported to her through GM’s chain of command.
"I wish I had known, because the minute we knew, we took action," she said.
Sen. Richard Blumenthal, D-Conn., criticized the investigation as "the best report money can
buy."
"It absolves upper management, denies deliberate wrongdoing and dismisses corporate
culpability," he said.
Barra
said Valukas interviewed 230 employees and reviewed 41 million
documents to produce the report, which also makes numerous
recommendations for handling safety problems more effectively.
Barra
has already named a new safety chief and pledged to work quickly
through a backlog of potential recalls. As a result, the automaker has
recalled a record 15.8 million cars and trucks in North America so far
this year.
In addition, GM has put procedures in place to make
sure that departments communicate and that safety issues get reported to
the top. Barra said people who don’t think such problems are being
addressed should contact her.
Barra, who testified on Capitol Hill
in April but deflected many questions by saying she was waiting for the
results of Valukas’ investigation, is certain to be called back.
Sen. Claire McCaskill, D-Mo., said she intends to hold a hearing this summer.
"I
won’t be letting GM leadership, or federal regulators, escape
accountability for these tragedies," she said in a statement. "The
families of those affected deserve no less."
Barra, a 34-year GM
veteran, told 1,000 employees gathered at the automaker’s suburban
Detroit technical center that the report was "enormously painful."
"I want you to never forget it," she said in a speech that was also broadcast to the company’s
212,000 employees worldwide.
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Associated Press writer Jeff Baenen in Minneapolis contributed to this report.