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GM top brass cleared in recall probe?

2014-06-05 15:37

IN THE CLEAR? General Motors' new CEO Mary Barra (above) and the automaker's senior management are likely to be cleared after a probe into the company's delayed recall of 1.6-million vehicles. Image: AFP

DETROIT, Michigan - An internal probe of General Motors' delay in recalling vehicles with defective ignition switches and linked to at least 13 deaths is expected to conclude there was no concerted cover-up and clear senior management of blame, the Wall Street Journal reported, citing people familiar with the matter.

The probe is expected to conclude that CEO Mary Barra, executives who reported directly to her, the board of directors and former GM boss Dan Akerson did not know about the defective switches before December 2013, the newspaper's contact said.


CHANGES TO GM'S MANAGEMENT?

The report will conclude that GM managers did not make connections and act on evidence of problems linked to deadly accidents and will recommend changes to GM culture and management, the Journal said.

GM is expected to announce the dismissal of "a number of people", among them the engineer who designed the ignition switch, Raymond DeGiorgio, and some members of the company's legal department, the newspaper added.

But GM's general counsel, Michael Millikin, who was co-leader of the internal probe with former US prosecutor Anton Valukas, is expected to continue to work for the automaker and is cleared of responsibility for the mishandling of defects and the recall delay, the newspaper was told.

Barra was expected to announce the findings of the internal probe today (June 5 2014).

In the wake of the internal report, the GM board is expected to form an operational risk-management committee, the Journal said.
GM spokesman Greg Martin did not immediately respond to an email seeking comment.

GM faces investigations by Congress, the Justice Department, the Securities and Exchange Commission and several states. It has also been sued by families of crash victims and investors, all of whom are likely to pore over GM's report for evidence to back their claims.

The faulty switches are in older, inexpensive, models such as the Saturn Ion and Chevrolet Cobalt. GM began recalling the cars in February 2014.

The defective switches, which are cheap to fix, can unexpectedly turn from the "on" position to the "accessory" position, causing the associated engine to stall, airbags to fail should the vehicle be in a collision and power assistance to braking and steering to malfunction.

While GM has acknowledged 13 deaths related to the ignition switches the National Highway Traffic Safety Administration has said the number could be higher.

Reuters reported on Monday (June 22014) that at least 74 people had died in crashes similar to those linked by GM to the faulty switches by an analysis of government data.

Valukas, co-lead of the probe, is well respected for his investigation of Lehman Brothers after the financial services firm collapsed in 2008 but the law firm of which he is chairman, Jenner & Block, has worked with GM since 2002, and at least two of the automaker's former top attorneys, Robert Osborne and Elmer Johnson, were partners at the Chicago law firm.

That led to questions of conflict of interest for the law firm when the probe was announced in March 2014. GM at that time said there was no such issue and that Valukas had been charged to go "where the facts take him".

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Read more on:    general motors  |  mary barra  |  detroit  |  probe  |  recall

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