General Motors CEO Mary Barra said on Thursday GM had fired 15 employees and disciplined five after receiving a report by former US Attorney Anton Valukas into the Cobalt ignition switch recall.
Barra announced details of the report and her response to a GM employees’ ‘town hall meeting’ at company headquarters in Detroit. She said in a subsequent statement she plans to act on all of its recommendations.
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Barra also said Kenneth Feinberg would administer a compensation programme for those who have lost loved ones or who have suffered serious physical injuries as the result of an ignition switch failure in recently recalled vehicles.
Barra described the Valukas findings as “extremely thorough, brutally tough, and deeply troubling”.
“Overall the report found that, from start to finish, the Cobalt saga was riddled with failures which led to tragic results for many,” Barra said. But she added the report revealed no conspiracy by the company to cover up the facts and no evidence that any employee made a trade-off between safety and cost.
Barra said the 15 individuals determined to have acted inappropriately were no longer with the company. Disciplinary actions had been taken against five other employees.
GM Chairman Tim Solso said the board of directors had worked closely with the management team to get the facts on the ignition switch issue and to see that changes were made to prevent such a tragedy from ever happening again.
“The board engaged Anton Valukas to investigate and determine what went wrong while already working with GM’s leadership to make necessary changes,” Solso said. “We have received and reviewed Valukas’ very thorough report and are continuing to work with management to oversee the implementation of the recommendations contained in the report.
“In addition, the board also retained independent counsel to advise us with respect to this situation and governance and risk management issues. We will establish a stand-alone risk committee to assist in overseeing these efforts.” Solso said. “The board, like management, is committed to changing the company’s culture and processes to ensure that the problems described in the Valukas report never happen again.
Solso said top management was not aware of the ignition switch problem until the end of last January.
“The Valukas report confirmed that Mary Barra, Mike Millikin and Mark Reuss did not learn about the ignition switch safety issues and the delay in addressing them until after the decision to issue a recall was made on 31 January, 2014,” Solso said.
Barra told employees the company had adopted and would continue to adopt sweeping changes in the way it handles safety issues.
Barra said she was committed to leading “in a way that brings honour and respect to this company”.
Karl Brauer, senior analyst at KBB.com, said: “Despite the damaging nature of this situation, Barra has handled it as well as any CEO in her position could. She has already taken several steps to address the issue of ‘internal silos’ that restricted information and caused a lack of accountability within the company. Her town hall speech made it clear that additional steps will be taken to punish employees who failed GM’s customers. 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.
“She also confirmed a compensation package for customers who suffered as a result of the ignition switch defect, which is the right thing to do even if GM is technically shielded from liability as a result of its restructuring in 2009.”
