General Motors CEO Mary Barra testifies on Capitol Hill in Washington, Wednesday, April 2, 2014, before the Senate Commerce, Science and Transportation subcommittee. (Photo: AP/Pablo Martinez Monsivais.)
An exhaustive internal investigation of General Motors Co.’s ignition-switch recall shortcomings revealed a “pattern of incompetence and neglect,” but no overarching conspiracy to conceal information from the public, the company said Thursday.
The investigation, led by former U.S. Attorney Anton Valukas, chairman of Jenner & Block, found GM’s handling of the recall was “riddled with failures which led to tragic results for many,” the company’s chief executive office said in a statement.
The Valukas report concluded that no one at GM took responsibility to fix the issue on the Chevy Cobalt, GM CEO Mary Barra said in the statement. The report, Barra said, “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.”
The report was sent to Congress on Thursday, according to The New York Times.
“The ignition-switch issue was touched by numerous parties at GM—engineers, investigators, lawyers—but nobody raised the problem to the highest levels of the company,” Barra said.
Barra described the Valukas findings as “extremely thorough, brutally tough, and deeply troubling,” the press release stated. Kenneth Feinberg of Feinberg Rozen will administer a compensation program for victims of crashes related to faulty ignition switches.
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 in a statement the company will implement recommendations made in the Valukas report.
“In addition, the board also retained independent counsel to advise us with respect to this situation and governance and risk management issues,” Solso said. “We will establish a stand-alone risk committee to assist in overseeing these efforts.”
GM has recalled 2.6 million cars and acknowledged that 13 people have died due to the ignition defects, which could shut off engines and prevent air bags from deploying in accidents. The U.S. National Highway Traffic Safety Administration on May 16 announced that GM had agreed to pay the maximum $35 million for its failure to promptly report the defects to the public.
GM faces more than 60 lawsuits over the ignition-switch recalls. GM has pushed to coordinate those cases in New York, where the automaker has moved in bankruptcy court to bar most of the cases under its 2009 Chapter 11 reorganization. A U.S. Judicial Panel on Multidistrict Litigation ruling, expected within a few weeks, will decide the identity of the judge who will issue critical rulings in the GM litigation.
The plaintiffs lawyers, at a recent session, outlined key facts in the litigation and focused attention on GM’s lawyers, including general counsel Michael Millikin, who signed off on settlements in earlier cases involving accidents that could have been caused by the ignition-switch defects.
Solso said Thursday the Valukas report “confirmed” that Barra and Millikin “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.”
The plaintiffs lawyers also said the problems go beyond the ignition switch, involving GM’s long culture of cost cutting, and they believe the number of deaths is much greater than the company has acknowledged. NHTSA officials in May declared that the defects could be responsible for more than 13 deaths.
Jenner collected more than 41 million documents for the investigation, and conducted more than 350 interviews. The report details roundtable discussions about litigation and cases that GM lawyers worked on.
The report includes nine recommendations for the GM legal staff, such as holding regular discussions between each product litigation attorney and the higher-level attorneys about potential safety issues. It also recommends a member of the legal staff be designated a liaison to the “Global Vehicle Safety” group at the company.
GM lawyers should also meet monthly with engineers, and should create guidance concerning the types of issues that should be elevated to the general counsel, the report found.