General Motors Co has issued a report detailing how for 11 years it turned a blind eye to an ignition-switch problem linked to at least 13 deaths, but largely pinned the blame on what the report described as incompetent lower-level employees, leaving top brass untouched.
The report, which will be the subject of upcoming congressional hearings, describes shortcomings of GM engineers, including a failure to understand “how the car was built”. Meanwhile, according to the 325-page report, the highest levels of the company were not made aware.
Providing a rare peek into the operations of one of the world’s biggest automotive companies, the internal investigation said GM had a long-running corporate culture in which nobody took responsibility.
The “GM nod” was how CEO Mary Barra described that culture, “when everyone nods in agreement to a proposed plan of action, but then leaves the room and does nothing,” the document said.
In February, GM finally began recalling 2.6 million vehicles for repairs. This recall, coupled with others announced by GM this year, has cost the company about $1.7 billion.
By 2011, three years before the recalls began, outside lawyers were warning GM’s in-house counsel that they needed to act, the report said.
Barra said 15 employees found to have “acted inappropriately” have been fired. More than half of them had been in senior or executive roles.
During April congressional hearings, Barra was unable to answer many questions, saying the internal investigation would find answers. But at the news conference she left some questions unanswered, including why GM redesigned the flawed ignition switch but failed to follow normal procedures of assigning a new part number. That has led some critics to believe someone was covering up the change.
Barra, who has been CEO for about five months, said disciplinary action was taken against five others.
Democratic Senator Edward Markey of Massachusetts, who is pushing legislation to clamp down on automaker defects, said of the GM report: “We need more than an accounting of past mistakes” and “an internal investigation alone is not nearly enough to ensure that a decade-long tragedy like this never happens again”.
Since early this year, the Detroit automaker has been enveloped in a scandal over why it took more than a decade to begin recalling low-cost cars with ignition-switch problems that were causing them to stall during operation. Because of the engine stalls, airbags failed to deploy during crashes and drivers had difficulty operating their vehicles because power steering and brake systems also malfunctioned. “As years passed and fatalities mounted, engineers investigating the non-deployments and attempting to understand their cause were neither diligent nor incisive,” the GM report said.
Also infused through the document is the notion that GM engineers misdiagnosed the safety problem by failing to connect dots that would have linked the cars’ system failures.
But at the same time, GM “heard over and over from various quarters, including customers, dealers, the media and its own employees, that the car’s ignition switch led to stalls in motion”, but employees “failed to take action or acted too slowly”.
Some new details also emerged about fatalities related to GM’s cars.
The report said GM had identified 54 frontal-impact crashes, involving the deaths of more than a dozen people, in which airbags did not deploy as a possible result of the faulty ignition switch.
Only last week, GM raised the count from 35 to 47, and has now raised it again, leading to questions about whether the 13 deaths linked to the defect will grow, as consumer advocates have predicted.
GM will soon set up a fund to compensate victims of crashes linked to the faulty switches
As expected, Barra also confirmed that GM will soon set up a fund to compensate victims of crashes linked to the faulty ignition switches.
The move to spare the highest executives from blame drew some sharp criticism.
“How do you truly fix a culture of carelessness and cover-up without cutting the head off the snake?” said Robert Hilliard, a lawyer for a plaintiff in a lawsuit against GM related to the ignition-switch defect.
Barra previewed the report at the company’s technical centre in Warren, Michigan, where she received a standing ovation from an estimated crowd of more than 1,000 employees. She emphasised that GM has already taken steps to beef up its internal safety operations.
While Barra noted a pattern of “incompetence and neglect” that she blamed on individuals who failed to “disclose critical pieces of information”, she added that there was “no conspiracy by the corporation to cover up facts”.
Furthermore, Barra said the internal investigation “found no evidence that any employee made a trade-off between safety and cost” in failing to deal with the safety problem.