Barra Says No Conspiracy In GM Scandal, Blames Incompetence And Neglect

Barra Says No Conspiracy In GM Scandal, Blames Incompetence And Neglect

General Motors Company (NYSE:GM) CEO Mary Barra has released the findings of Chicago attorney Anton Valukas’ investigation into the faulty ignition switch scandal today, concluding that more than 11 years of inaction was the result of “a pattern of incompetence and neglect,” but that there was no evidence of a conspiracy. She claims that no GM employee made a trade-off between safety and cost, but that the breakdown happened because the organization was divided into ‘silos’ with no one willing to step up and tackle difficult problems.

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Barra specifically said that former executives were not involved in the decision to ignore the safety problems that led to at least 13 deaths saying that, “no one raised the issues to the highest levels of the company.”

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Fifteen fired and five disciplined says Barra

Fifteen people have been fired for their roles in the scandal, some for misconduct or incompetence and others for “not doing enough.” Nathan Bomey at the Detroit Free Press reports that suspended General Motors Company (NYSE:GM) engineer Ray DiGiorgio is one of the people who has been fired today, and fellow engineer Gary Altman who was suspended at the same time as DiGiorgio seems like a fair guess for another, but the full list hasn’t yet been made public. Disciplinary action is being taken against an additional five employees, and Barra claims that this is enough to settle all personnel issues related to the scandal.

To make sure that a similar breakdown in corporate responsibility can’t happen again, Barra announced five changes at General Motors Company (NYSE:GM), some of which had already been made public. Jeff Boyer has been made VP of Global Vehicle Safety; a Speak Up for Safety program has been created to encourage employees to come forward if they know that something is wrong; the company has added 35 new safety investigators to aggressively look for existing problems (which could explain the string of recalls unrelated to the faulty ignition switches); a new Global Product Integrity organization within the company will coordinate communication on GM products; and senior management will be involved in safety decision making in the future.

Barra also announced that a compensation program is being put together for victims, but the details apparently haven’t been finalized.

General Motors stock up, but victims unlikely to be satisfied

General Motors Company (NYSE:GM) stock rose in pre-market trading after Barra’s remarks, possibly responding to the fact that the report didn’t implicate executives of criminal wrongdoing, but it’s hard to imagine that everyone will be satisfied. There have been reports that GM has pushed back against families who reported fatal crashes over the last few years, which implies a coordinated response to the issue. Barra might be satisfied that the Valukas report has settled the issue of how such a major problem could be allowed to continue, but that doesn’t mean victims and their families will accept its findings.

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Michael has a Bachelor's Degree in mathematics and physics from Boston University and Master's Degree in physics from University of California, San Diego. He has worked as an editor and writer for several magazines. Prior to his career in journalism, Michael Worked in the Peace Corps teaching math and science in South Africa.
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