General Motors GM CEO Mary Barra called a new report on the company's deadly ignition switch controversy a painful experience that the automaker should never forget.
The report was carried out by an independent investigator.
At a global town hall meeting Thursday, Barra said the report revealed a “pattern of incompetence and neglect,” but no cover-up, behind the defective ignition switches. The defective ignition switches have been linked to at least 13 deaths.
Barra also announced that 15 GM employees, including several in senior and executive positions, had been fired.
The investigation, ordered by the company and overseen by former U.S. attorney Anton Valukas, reportedly involved more than 350 interviews and over 41 million documents. Barra said Valukas and his team “had complete independence in their activities” during their probe into the ignition switch crisis.
“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. “If this information had been disclosed, I believe in my heart the company would have dealt with this matter appropriately.”
Barra became GM's CEO in mid-January, just before the ignition switch recall was made public. The Valukas report, which Barra called “extremely thorough, brutally tough and deeply troubling,” found GM personnel failed to properly address the ignition switch defect for 11 years.
Paraphrasing the report, Barra noted the issue was “touched by numerous parties at GM – engineers, investigators, lawyers – but nobody raised the problem to the highest levels of the company.”
She also announced the establishment of a compensation fund for the victims of the defective ignition switches.
What Are Industry Analysts Saying?
Industry observers say Barra is showing herself to be an active chief executive, with her handling of the recall and its related controversies.
“She wants to not only change GM’s corporate culture, but to keep this incident top-of-mind going forward so the automaker won’t ever experience these failures again,” Karl Brauer, a senior analyst at Kelley Blue Book, told Benzinga.
Brauer said the compensation program was “the right thing to do,” even if GM might be shielded from any liability due to its bankruptcy restructuring in 2009.
“She effectively balanced her pride in the company’s current product and performance against the need to do better in the key areas of safety, internal communication and accountability,” he added.
But on Capitol Hill, lawmakers who have been investigating the GM recall were less complimentary.
The Associated Press quoted Rep. Fred Upton, R-Michigan, chairman of the House Energy and Commerce Committee, as saying the Valukas report's initial findings “are deeply disturbing, suggesting that communications and management failures ran deep and wide within GM. The failure to identify red flags and conduct a recall sooner cost lives."
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