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.

 
 

Don't miss ...

 

<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

Power outage across Bangladesh as national grid collapses
Dhaka, Nov 1 (IANS) Power outages Saturday hit several places in Bangladesh, including the capital Dhaka, due to the collapse of the national grid. Reports of power cuts were coming in from several other places...
Read more on Business Balla
 
Space plane crash: Sir Branson 'shocked' but to 'persevere'
New York, Nov 1 (IANS) Richard Branson, founder of the Virgin Group, was "shocked and saddened" by the news of the Virgin Galactic passenger space plane crash but said that he would "persevere". The space plane...
Read more on Politics Balla
 
Drugs to abet cancer cells suicide found
London, Nov 1 (IANS) British scientists have found a drug combination that can trigger the self-destruct process in lung cancer cells -- paving the way for new treatments. The combination of two drugs, called TRAIL...
Read more on Business Balla
 
Boko Haram leader says kidnapped girls married off
Lagos, Nov 1 (IANS) The leader of the Nigerian Boko Haram insurgents, Abubakar Shekau, has in a new video said the over 200 abducted schoolgirls have been married to members of the group. The video, released Friday,...
Read more on Politics Balla
 
Another Burkina Faso army officer claims power
Ouagadougou, Nov 1 (IANS) Burkina Faso's senior military officer Isaac Zida, who was in command of the presidential guard, Saturday announced via a televised speech that he has seized power as head of state during the...
Read more on Politics Balla
 
Climate change threatens global health security: UNEP
San Juan, Nov 1 (IANS/EFE) The rapid propagation in recent years of infectious diseases such as Malaria, Chikungunya and even Ebola is one more example of how climate change threatens global health security. "Climatic...
Read more on Politics Balla
 
Nine killed in Afghanistan suicide bombing
Kabul, Nov 1 (IANS) Nine security personnel were killed while 20 civilians were injured in a suicide car bombing in the eastern Afghan province of Lowgar Saturday, the provincial government spokesman said. "One...
Read more on Politics Balla
 
Al Pacino considered name change
Al Pacino considered changing his name to ''Sonny Scott'' when he started acting. The 74-year-old star was advised to alter his moniker when he began working in the movie industry because any stars with an ''ethnic...
Read more on Movie Balla