Home >Companies >GM fires 15 people following probe into faulty ignition switch

Southfield, Michigan: General Motors Co chief executive officer Mary Barra told employees that the largest US automaker’s has removed 15 employees after an investigation into a fatal flaw found incompetence and neglect, she said.

This should have never happened. It is simply unacceptable, Barra told almost 1,000 employees at GM’s technical center in suburban Detroit. The employee town hall meeting to reveal the findings of the company’s internal investigation into delays around the recall of 2.59 million small cars linked to at least 13 deaths is being telecast to all of the company’s operations around the world, including factories. It’s also being webcast and is on LIVE.

From start to finish, the Cobalt saga was riddled with tragedy, she said.

The investigation confirmed that Barra’s previous claims that she was previously unaware of the flawed switch. It will also clear GM’s top lawyer, Michael Millikin. Ray DeGiorgio, the engineer in charge of the flawed part, and Gary Altman, a programme engineering manager, are being fired as more than a dozen employees depart the company, said a person familiar with the matter.

The report marks a pivotal moment in Barra’s efforts to change the culture of America’s largest automaker after the biggest legal and public-relations challenge since its government-backed bankruptcy in 2009. Barra, who became CEO shortly before the scandal broke, has attempted to persuade Congress and customers that the safety woes reflect the so- called old GM not the financially healthy, post-bankruptcy version.

‘Turning point’

This is a huge turning point for Mary in terms of getting it all out in the open, but it’s not the end, said Michelle Krebs, senior analyst at Fixing this is going to take more than getting rid of some people and moving boxes around on the org chart. This is going to require culture change and an ongoing vigilance.

A quick resolution will allow Barra and her team to capitalize on rebounding profits and the strongest sales since the collapse of Lehman Brothers. GM gained 0.8% to $36.81 at 9:14 am before regular trading. The shares rose 3.6% on Wednesday, for the biggest one-day gain in more than half a year.

The probe, headed up by lawyer Anton Valukas, chairman of law firm Jenner & Block LLC, is based in part on 1 million documents also released to Congress, said a person who asked not to be identified because the matter is private. The trove of material shows the automaker was hobbled by engineers who failed to detect a flawed ignition switch and a dysfunctional review system that delayed a recall for 10 years, people familiar with the matter said.

Valukas presented his findings to GM board three days ago, Barra said. She said the report is brutally tough, finding incompetence and a lack of urgency, but no conspiracy to cover up facts.

Outside investigations

Still, Congress and the Justice Department continue to investigate GM over why it took more than a decade to recall 2.59 million small cars with defects linked to at least 13 deaths. The defective ignition switch could be jarred into the accessory position, disabling power steering and preventing air bags from deploying. The failure to diagnose the problem was outlined in the documents turned over to Congress in recent weeks, the people said. The records show engineers struggling to address several issues with the vehicle’s ignition switch, some of the people said. There were problems starting the cars that were perceived as a bigger issue than the stalling, these people said.

Barra had suspended with pay DeGiorgio, the engineer responsible for the ignition switch, and Gary Altman, the programme engineering manager for the Cobalt until May 2005, people familiar with the situation have said. Records released in April by the House panel investigating GM show that DeGiorgio signed off on changing the ignition switch in 2006 and didn’t change its part number, effectively hiding the change and making it harder for future engineers to pinpoint the problem. BLOOMBERG

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