Business
4:32 pm
Thu June 5, 2014

Internal Probe Decries GM's 'Incompetence And Neglect'

Originally published on Thu June 5, 2014 7:58 pm

Transcript

AUDIE CORNISH, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish. A blistering report was released today about why General Motors failed to recall millions of vehicles with a defective part - a faulty ignition switch that has been linked to at least 13 deaths. The report, prepared by a former U.S. attorney, details a pattern of incompetence and misconduct that reached the executive floors at the auto company. In response, GM has dismissed 15 employees and is creating a victims' compensation fund. NPR's Sonari Glinton reports from Detroit.

SONARI GLINTON, BYLINE: When Mary Barra, the CEO of General Motors, was in front of Congress earlier this year, she deflected dozens and dozens of questions to the point of parody by saying, wait until our independent investigation is done. Well, today former U.S. attorney Anton Valukas released his report. And let's just say it was not pretty.

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MARY BARRA: What Valukas found in this situation was a pattern of incompetence and neglect. Repeatedly individuals failed to disclose critical pieces of information that could have fundamentally changed the lives of those impacted by the faulty ignition switch.

GLINTON: That was Barra, briefing employees at GM's technology center in Warren, Michigan, outside of Detroit. Barra says one of her first responses has been to dismiss 15 employees - most of them on the executive level - and discipline five others. The report details a widespread lack of accountability. And critics of the industry note you can see the disarray in the quality of GM's cars in the 20 years leading up to bankruptcy. The report shows a company that failed to tackle basic issues, such as problems with an ignition switch that costs just a few dollars.

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BARRA: While everyone who was engaged on the ignition switch issue had the responsibility to fix it, no one took responsibility. Through the entire 11-year history, there was no demonstrated sense of urgency, right to the very end.

GLINTON: The report shows engineers who were responsible for safety failed to realize that airbags didn't deploy after a car stalled out. Also lawyers outside of GM repeatedly warned the company of problems associated with faulty ignition switches. And employees never brought those issues to senior executives. Barra has promised to fundamentally change how the company functions. So unlike in the past, the CEO and her chief lieutenants will be part of deciding on recalls. The company is also creating a victims' fund to compensate those who have been injured or hurt related to the ignition switch. The size is still not determined. Barra says the recall disaster is not another business crisis for GM, like the bankruptcy almost exactly five years ago.

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BARRA: I never want to put this behind us. I want to keep this painful experience permanently in our collective memories. I don't want to forget what happened because I, and I know you, never want this to happen again.

MICHELLE KREBS: I think the ultimate test will be, does the company really change? Do these mistakes get made again?

GLINTON: Michelle Krebs is an analyst with autotrader.com. She says the size and scope of a company like GM makes it hard to change, and she says the entire industry is watching GM right now.

KREBS: Every carmaker is doing recalls right now because nobody wants to get caught in this position. And we saw the same thing after the Toyota recall. Everybody's doing recalls. Everybody's paying close attention to any kind of issues they have in their products, and they're taking action.

GLINTON: But Krebs, who's been following the industry for many decades, says there's sort of a pattern that has been established, like after Toyota's recall crisis or the Ford-Firestone rollover recall.

KREBS: All the car companies, after those big events - the Ford-Firestone, the Toyota recalls - learn a lesson. But it seems to be short-lived.

GLINTON: The question is, just how long will these lessons stick? Sonari Glinton, NPR News. Transcript provided by NPR, Copyright NPR.