Ignition Switch Report Spares CEO Barra, But Exposes GM's Culture

Jun 5 2014, 1:00pm CDT | by

On Thursday, General Motors chief executive Mary Barra met with employees and journalists before the company submitted a report to federal regulators outlining the problems that led to its ignition switch recall crisis.

No wonder Barra wanted to get her message out ahead of the details. The report by attorney Anton Valukas is a devastating take down of the inertia and incompetence inside GM over the defects that have killed 13 people, and possibly more. (Read the report here.)

The 325-page Valukas Report, made public by the National Highway Traffic Safety Administration, actually clears Barra and two other top GM executives, Mark Reuss, who runs global product development, and Michael Millikin, the company’s chief counsel, from responsibility in the situation.

It also makes clear that GM’s board got no specific information about the defects that have led GM to recall 2.6 million Chevrolet, Pontiac and Saturn vehicles.

But in doing so, the report also exposes what must be a CEO’s worst nightmare: a costly situation, in terms of money and lives, where lower-ranking employees either made decisions or did nothing without letting the company’s most senior leaders know.

Further, a layer of executives below the top also were involved in the situation, in areas such as public policy, engineering and legal, but didn’t tell their superiors, either.

GM said Thursday that 15 employees have been fired, while another five have been disciplined. Among those fired were engineer Ray DeGiorgio, who made a decision to change an ignition part but not change a part number, which kept investigators from finding the source of the problem for years. Also let go was Gary Altman, who directed the engineering team for the Chevrolet Cobalt.

“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.

The report, however, disclosed a number of things about GM itself that make it hard to believe that the “new GM” Barra says she is leading exists. The document describes a company where there was no sense of urgency to fix the ignition problem, right up until GM notified the government of its first recall for the cars in January.

Other things unmasked by the report:

The GM Nod. As described by Barra, this is a practice of GM managers sitting in a room, nodding in agreement at steps that need to be taken, then leaving the room and doing nothing.

The GM Salute. The Valukas Report defines this as the habit of employees going through meetings, with their arms folded and pointing outward at others, as if to say that the responsibility lay with them, not with the employee.

The fish scale. In 2012, engineers went to a junkyard to look at salvaged vehicles that might have faulty ignitions. They discovered that it appeared to shift an ignition out of the “run” position (meaning on) but hadn’t brought standard measuring equipment. So, an engineer wait to a bait and tackle store to buy a fish scale.

For Barra, the challenges will continue. She told analysts Thursday that GM could face additional expenses related to the recall, although the amount is not yet clear. She faces another round of Congressional hearings, with a number of lawmakers saying Thursday that they did not think the report answered sufficient questions.

Meanwhile, attorney Kenneth Feinberg will be determining how many victims deserve compensation from GM, and how much each will receive. That means a situation that began in 2002 promises to stretch throughout 2014, and likely beyond.

 
 
 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

IPad Air Giveaway 2014 is Online
IPad Air Giveaway 2014 is Online
Our sister site I4U News is giving away a brand new iPad Air or if you can wait an iPad Air 2. This is an $499 value.
 
 
Your Parent Or Kid Moved In: Are You Covered?
A record 57 million Americans now live in multigenerational family households — double the number in 1980, according to a new Pew Research Center study. And I bet many of them have the wrong homeowner’s or renters...
 
 
Pandora Looks to Challenge Terrestrial Radio's Dominance in Cars
Pandora Media is one of the largest Internet radio providers in the U.S. with more than 75 million active users. While the company’s active user count has increased at a robust pace historically, it is likely to slow...
 
 
Are General Manager Salaries About To Skyrocket? Will There Be A Front Office Salary Cap?
Are General Manager Salaries About To Skyrocket? Will There Be A Front Office Salary Cap?
It’s January 2026. New York Yankees owner Hal Steinbrenner gets out of his driverless car and triumphantly marches before the gathered press to introduce his prized new free agent. It’s a record-breaking contract—over...
 
 
 

Latest from the Network

Lily Allen's record label closed?
Los Angeles, Nov 21 (IANS) Singer Lily Allen's record label ITNO has reportedly been closed after three years. Allen set up the label ITNO, which stands for "In The Name Of", in 2011 with Sony, but has since been...
Read more on Celebrity Balla
 
Drone attack in Pakistan kills five suspected militants
Islamabad, Nov 21 (IANS) At least five suspected militants, including what sources claim to be a high value target, were killed in a US drone attack in Pakistan's North Waziristan region Thursday, media reported....
Read more on Politics Balla
 
Mike Nichols, director of 'The Graduate', dies at 83
Washington, Nov 20 (IANS/EFE) Mike Nichols, whose 1967 film "The Graduate" earned him an Oscar as best director, has died, media reported Thursday. He was 83. "He was a true visionary, winning the highest honors in...
Read more on Celebrity Balla
 
Myanmar military launches counter-attack against armed group
Yangon, Nov 20 (IANS) The Myanmar government said Thursday that its troops had launched a counter-attack on the ethnic Kachin Independence Army (KIA) after the armed group disrupted their normal movement. The...
Read more on Politics Balla
 
Iraqi forces retake town from IS
Baghdad, Nov 20 (IANS) Iraqi security forces Thursday retook control of a town from Islamic State (IS) militant group in eastern Iraq, and are fighting to seize another in the west, security sources said. In Iraq's...
Read more on Politics Balla
 
Turkey to cooperate with Iraq in fighting IS: Iraqi PM
Baghdad, Nov 20 (IANS) Iraqi Prime Minister Haider al-Abadi said Thursday that Turkey has offered military cooperation to fight the Islamic State(IS) militant group. "There is an agreement on information exchange and...
Read more on Politics Balla
 
Hostilities, human rights violations continue in Ukraine: OHCHR
Geneva, Nov 20 (IANS) Hostilities, human rights violations and abuses continued in eastern Ukraine despite the announcement of the Sep 5 ceasefire, a report released by the Office of the UN High Commissioner for Human...
Read more on Politics Balla
 
Carrie Underwood learned baby news at dinner
Carrie Underwood learned she was expecting a baby boy while having dinner with her husband. The 'Something In the Water' singer and spouse Mike Fisher are expecting their first child together but felt the sonographer's...
Read more on Celebrity Balla
 
Keira Knightley's fan fear
Keira Knightley finds Benedict Cumberbatch's fans terrifying. The 29-year-old actress insists her 'Imitation Game' co-star's devoted female followers - who are dubbed 'The Cumberbitches' - are ''lovely'' but she finds...
Read more on Celebrity Balla
 
Sheryl Crow selling boots for charity
Sheryl Crow is selling her cowboy boots for charity. The 'Soak Up The Sun' hitmaker has decided to offload the clothes, shoes and accessories she no longer wears on eBay's Charity Shop to raise money for the Feeding...
Read more on Celebrity Balla
 
 
Ignition Switch Report Spares CEO Barra, But Exposes GM's Culture - Auto Balla
 

Ignition Switch Report Spares CEO Barra, But Exposes GM's Culture

Jun 5 2014, 1:00pm CDT | by

On Thursday, General Motors chief executive Mary Barra met with employees and journalists before the company submitted a report to federal regulators outlining the problems that led to its ignition switch recall crisis.

No wonder Barra wanted to get her message out ahead of the details. The report by attorney Anton Valukas is a devastating take down of the inertia and incompetence inside GM over the defects that have killed 13 people, and possibly more. (Read the report here.)

The 325-page Valukas Report, made public by the National Highway Traffic Safety Administration, actually clears Barra and two other top GM executives, Mark Reuss, who runs global product development, and Michael Millikin, the company’s chief counsel, from responsibility in the situation.

It also makes clear that GM’s board got no specific information about the defects that have led GM to recall 2.6 million Chevrolet, Pontiac and Saturn vehicles.

But in doing so, the report also exposes what must be a CEO’s worst nightmare: a costly situation, in terms of money and lives, where lower-ranking employees either made decisions or did nothing without letting the company’s most senior leaders know.

Further, a layer of executives below the top also were involved in the situation, in areas such as public policy, engineering and legal, but didn’t tell their superiors, either.

GM said Thursday that 15 employees have been fired, while another five have been disciplined. Among those fired were engineer Ray DeGiorgio, who made a decision to change an ignition part but not change a part number, which kept investigators from finding the source of the problem for years. Also let go was Gary Altman, who directed the engineering team for the Chevrolet Cobalt.

“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.

The report, however, disclosed a number of things about GM itself that make it hard to believe that the “new GM” Barra says she is leading exists. The document describes a company where there was no sense of urgency to fix the ignition problem, right up until GM notified the government of its first recall for the cars in January.

Other things unmasked by the report:

The GM Nod. As described by Barra, this is a practice of GM managers sitting in a room, nodding in agreement at steps that need to be taken, then leaving the room and doing nothing.

The GM Salute. The Valukas Report defines this as the habit of employees going through meetings, with their arms folded and pointing outward at others, as if to say that the responsibility lay with them, not with the employee.

The fish scale. In 2012, engineers went to a junkyard to look at salvaged vehicles that might have faulty ignitions. They discovered that it appeared to shift an ignition out of the “run” position (meaning on) but hadn’t brought standard measuring equipment. So, an engineer wait to a bait and tackle store to buy a fish scale.

For Barra, the challenges will continue. She told analysts Thursday that GM could face additional expenses related to the recall, although the amount is not yet clear. She faces another round of Congressional hearings, with a number of lawmakers saying Thursday that they did not think the report answered sufficient questions.

Meanwhile, attorney Kenneth Feinberg will be determining how many victims deserve compensation from GM, and how much each will receive. That means a situation that began in 2002 promises to stretch throughout 2014, and likely beyond.

 
 
 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

IPad Air Giveaway 2014 is Online
IPad Air Giveaway 2014 is Online
Our sister site I4U News is giving away a brand new iPad Air or if you can wait an iPad Air 2. This is an $499 value.
 
 
Your Parent Or Kid Moved In: Are You Covered?
A record 57 million Americans now live in multigenerational family households — double the number in 1980, according to a new Pew Research Center study. And I bet many of them have the wrong homeowner’s or renters...
 
 
Pandora Looks to Challenge Terrestrial Radio's Dominance in Cars
Pandora Media is one of the largest Internet radio providers in the U.S. with more than 75 million active users. While the company’s active user count has increased at a robust pace historically, it is likely to slow...
 
 
Are General Manager Salaries About To Skyrocket? Will There Be A Front Office Salary Cap?
Are General Manager Salaries About To Skyrocket? Will There Be A Front Office Salary Cap?
It’s January 2026. New York Yankees owner Hal Steinbrenner gets out of his driverless car and triumphantly marches before the gathered press to introduce his prized new free agent. It’s a record-breaking contract—over...
 
 
 

Latest from the Network

Lily Allen's record label closed?
Los Angeles, Nov 21 (IANS) Singer Lily Allen's record label ITNO has reportedly been closed after three years. Allen set up the label ITNO, which stands for "In The Name Of", in 2011 with Sony, but has since been...
Read more on Celebrity Balla
 
Drone attack in Pakistan kills five suspected militants
Islamabad, Nov 21 (IANS) At least five suspected militants, including what sources claim to be a high value target, were killed in a US drone attack in Pakistan's North Waziristan region Thursday, media reported....
Read more on Politics Balla
 
Mike Nichols, director of 'The Graduate', dies at 83
Washington, Nov 20 (IANS/EFE) Mike Nichols, whose 1967 film "The Graduate" earned him an Oscar as best director, has died, media reported Thursday. He was 83. "He was a true visionary, winning the highest honors in...
Read more on Celebrity Balla
 
Myanmar military launches counter-attack against armed group
Yangon, Nov 20 (IANS) The Myanmar government said Thursday that its troops had launched a counter-attack on the ethnic Kachin Independence Army (KIA) after the armed group disrupted their normal movement. The...
Read more on Politics Balla
 
Iraqi forces retake town from IS
Baghdad, Nov 20 (IANS) Iraqi security forces Thursday retook control of a town from Islamic State (IS) militant group in eastern Iraq, and are fighting to seize another in the west, security sources said. In Iraq's...
Read more on Politics Balla
 
Turkey to cooperate with Iraq in fighting IS: Iraqi PM
Baghdad, Nov 20 (IANS) Iraqi Prime Minister Haider al-Abadi said Thursday that Turkey has offered military cooperation to fight the Islamic State(IS) militant group. "There is an agreement on information exchange and...
Read more on Politics Balla
 
Hostilities, human rights violations continue in Ukraine: OHCHR
Geneva, Nov 20 (IANS) Hostilities, human rights violations and abuses continued in eastern Ukraine despite the announcement of the Sep 5 ceasefire, a report released by the Office of the UN High Commissioner for Human...
Read more on Politics Balla
 
Carrie Underwood learned baby news at dinner
Carrie Underwood learned she was expecting a baby boy while having dinner with her husband. The 'Something In the Water' singer and spouse Mike Fisher are expecting their first child together but felt the sonographer's...
Read more on Celebrity Balla
 
Keira Knightley's fan fear
Keira Knightley finds Benedict Cumberbatch's fans terrifying. The 29-year-old actress insists her 'Imitation Game' co-star's devoted female followers - who are dubbed 'The Cumberbitches' - are ''lovely'' but she finds...
Read more on Celebrity Balla
 
Sheryl Crow selling boots for charity
Sheryl Crow is selling her cowboy boots for charity. The 'Soak Up The Sun' hitmaker has decided to offload the clothes, shoes and accessories she no longer wears on eBay's Charity Shop to raise money for the Feeding...
Read more on Celebrity Balla