General Motors Releases Ignition Switch Recall Report

The internal investigation has been completed and General Motors has released the report that looks into the handling of the ignition switch recall. During a town hall meeting this morning at GM's headquarters, CEO Mary Barra said the report was "extremely thorough, brutally tough, and deeply troubling," and announced changes to the company's policies and processes.

“Overall the report found that, from start to finish, the Cobalt saga was riddled with failures which led to tragic results for many,” said Barra.

The 315 page report, done by former U.S. Attorney Anton Valukas finds that General Motors suffered from “organizational dysfunction” and that there were deceit and missed opportunities for GM to come clean on the ignition switch problem. The report also determined that Barra, General Counsel Michael Millikin, and head of global product development Mark Reuss did not learn of the ignition switch problem and the delay in addressing them until after the decision to issue a recall was made on January 31, 2014.

"The structure within GM was one in which no one was held responsible and no one took responsibility," said the report.

Barra announced at the meeting that fifteen individuals have been fired after it was determined to have acted inappropriately. More than half of those individuals were in executive roles or higher. Another five individuals have received disciplinary action.

Barra also announced a compensation program that will be headed up by attorney Kenneth Feinberg. The program will offer compensation to those who either suffered a serious injury or lost a loved one due to the ignition switch problem.

GM has also taken action by instituting a number of changes on how it deals with safety issues.

• Appointing Jeff Boyer to the new position of Vice President of Global Vehicle Safety
  
• Adding 35 product safety investigators
  
• Creating the Speak up for Safety program that allows employees to report on potential safety issues
  
• Introducing a new Global Product Integrity organization to enhance overall safety and quality performance
  
• Restructuring the recall decision making process to raise it to the highest levels of the company
  

"Together, we have to understand that the attitudes and practices that allowed this failure to occur will not be tolerated. Also, if we think that cleaning up this problem and making a few process changes will be enough, we are badly mistaken. Our job is not just to fix the problem. Our job must be to set a new industry standard for safety, quality, and excellence,” said Barra.

Source: The Detroit News (2), Motoramic, General Motors, Valukas Report

Press Release is on Page 2

GM Receives Extremely ‘Thorough,’ ‘Brutally Tough’ and ‘Deeply Troubling’ Valukas Report

2014-06-05

• Company will act on all recommendations
  
• 15 GM employees no longer with company
  
• Five other GM employees disciplined
  
• Report reveals no conspiracy or cover-up
  
• Feinberg to administer compensation fund
  

DETROIT – General Motors CEO Mary Barra said today that GM has received the findings of an investigation by former U.S. Attorney Anton Valukas into the Cobalt ignition switch recall and plans to act on all of its recommendations.

She again expressed deep sympathy for the victims of accidents related to the ignition switch defect and their families. In addition, Barra announced that Kenneth Feinberg will administer a compensation program 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, noting that 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 15 individuals who were determined to have acted inappropriately are no longer with the company. Disciplinary actions have been taken against five other employees.

GM Chairman Tim Solso said the Board of Directors has been working closely with the management team to get the facts on the ignition switch issue and to see that changes are 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.

“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 Jan. 31, 2014,” Solso said.

Barra emphasized to employees that the company has adopted and will continue to adopt sweeping changes in the way it handles safety issues. The actions to date include:

• Appointing Jeff Boyer as Vice President of Global Vehicle Safety, elevating and integrating GM’s safety processes under a single leader
  
• Adding 35 product safety investigators that will allow GM to identify and address issues much more quickly
  
• Instituting the Speak up for Safety program encouraging employees to report potential safety issues quickly and forcefully
  
• Creating a new Global Product Integrity organization to enhance overall safety and quality performance, and
  
• Restructuring the recall decision making process to raise it to the highest levels of the company.
  

In her remarks to employees, Barra said she is committed to leading "in a way that brings honor and respect to this company.

"Together, we have to understand that the attitudes and practices that allowed this failure to occur will not be tolerated,” she said. “Also, if we think that cleaning up this problem and making a few process changes will be enough, we are badly mistaken. Our job is not just to fix the problem. Our job must be to set a new industry standard for safety, quality, and excellence.”