GM ousts 15 employees over deadly ignition-switch scandal, will compensate crash victims

The Associated Press

General Motors CEO Mary Barra addresses employees at the automaker's vehicle engineering center in Warren, Mich., Thursday, June 5, 2014. Barra said 15 employees have been fired and five others have been disciplined over the company's failure to disclose a defect with ignition switches that is now linked to at least 13 deaths. (AP Photo/Carlos Osorio)

Associated Press + More

By TOM KRISHER and DEE-ANN DURBIN, AP Auto Writers

WARREN, Mich. (AP) — General Motors said Thursday that it has forced out 15 employees for their role in the deadly ignition-switch scandal and will set up a compensation fund for crash victims, as an internal investigation blamed the debacle on engineering ignorance and bureaucratic dithering, not a deliberate cover-up.

GM took more than a decade to recall 2.6 million cars with bad switches that are now linked to at least 13 deaths by the automaker's count.

"Group after group and committee after committee within GM that reviewed the issue failed to take action or acted too slowly," Anton Valukas, the former federal prosecutor hired by the automaker to investigate the reason for the delay, said in a 315-page report. "Although everyone had responsibility to fix the problem, nobody took responsibility."

GM CEO Mary Barra said more than half the 15 employees forced out were senior legal and engineering executives who failed to disclose the defect and were part of a "pattern of incompetence." Five other employees have been disciplined, she said, without identifying any of them.

The automaker said it will establish a compensation program covering those killed or seriously injured in the more than 50 accidents blamed on the switches. GM said not say how much money will be involved, but a Wall Street analyst estimated the payouts will total $1.5 billion.

Barra called the report "brutally tough and deeply troubling."

The report lays bare a company that operated in "silos," with employees who didn't share information and didn't take responsibility for problems or treat them with any urgency.

Valukas also portrayed a corporate culture in which there was heavy pressure to keep costs down, a reluctance to report problems up the chain of command, a skittishness about putting safety concerns on paper, and general bureaucratic resistance to change.

He described what was known as the "GM nod," in which "everyone nods in agreement to a proposed plan of action but then leaves the room and does nothing."

Valukas exonerated Barra and two other top executives, Mark Reuss, chief of global product development, and general counsel Michael Millikin, saying there is no evidence they knew about the problems any earlier than last December.

Since February, GM has recalled 2.6 million older-model Chevrolet Cobalts, Saturn Ions and other small cars because their ignitions can slip out of the "run" position and shut off the engine. That disables the power-assisted steering and brakes, making it difficult to control the car, and deactivates the air bags.

Trial lawyers suing the company put the death toll at more than 60.

"It's somewhat comforting to realize that they do know that some things were done incorrectly and they're aware of that. They made the appropriate measures to make sure it doesn't happen again," said Ken Rimer, whose 18-year-old stepdaughter, Natasha Weigel, was killed in a 2006 Cobalt crash in Wisconsin.

Last month, GM paid a record $35 million fine for failing to promptly report the bad ignition switches to federal highway safety regulators. Federal prosecutors are also investigating and could bring criminal charges against the automaker and some of its employees.

Deep within the company, engineers and others believed the ignition switch flaw was a "customer convenience" issue rather than a safety problem, the report said. Engineers believed that the cars could still be adequately steered when the engines shut off, and they didn't realize the air bags became disabled — even after police, academic experts and others outside GM had recognized the problem, according to the report.