GM fires 15 over ignition scandal but says 'no coverup'

GMT 16:56 2014 Thursday ,05 June

Arab Today, arab today GM fires 15 over ignition scandal but says 'no coverup'

GM Chief Executive Officer Mary Barra (C), Mark Reuss (L), Executive Vice President
Washington - AFP

General Motors chief executive Mary Barra said Thursday that the company has fired 15 mostly senior executives over the deadly ignition scandal that has placed the automaker under federal investigation.
But Barra said an internal investigation into why the company did not act on the problem for 11 years concluded there had been no concerted effort to hide it, instead showing  a "deeply troubling" history of "incompetence and neglect."
She said the company would take full responsibility for the problem and was setting up a compensation fund for victims of accidents tied to the faulty ignitions, four months after GM began recalling 2.6 million cars over the problem.
"The Cobalt saga was riddled with failure," she told a meeting of company employees, referring to the main car model affected by the problem.
"We misdiagnosed the problem from the very beginning... We have to own this problem."
 Barra said she "was deeply saddened and disturbed" by the report by former US attorney Anton Valukas, recruited by the top US automaker to find out why it took so long for the company to act on the ignition problem.
The report showed many people in the company had been aware of the problem, in which ignitions could be easily jolted into the off position while a car was still running, shutting down power steering and the safety airbags.
GM heard "over and over" about the problem from customers, dealers, employees and the media, but "nobody took responsibility" to deal with it, the report said.
- 'Nobody raised the problem' -
"Nobody raised the problem to the highest levels of the company. As a result, those in the best position to demand quick answers did not know questions needed to be asked."
The company knows of 54 accidents in which airbags did not deploy, possibly due to the ignition problem, and 13 deaths. 
The US auto safety regulator, the National Highway Traffic Safety Administration, said it thinks the death toll could be higher.
And the independent Center for Auto Safety says it has counted more than 300 deaths linked to airbag non-deployment in the GM cars covered by the ignition recall, though it has not linked that problem to ignition shutdowns.
GM is reportedly facing a federal criminal probe and a congressional investigation for not having recalled the cars years ago.
Victim lawsuits could total in the billions of dollars, according to analysts. Barra would not say how compensation would be awarded, saying that would be determined by Kenneth Feinberg, the victim compensation expert retained by GM. 
However, she said, "We are going to do the right thing for the affected parties."
The Valukas report showed a history of management deficiences and poor judgments, with numerous company employees touching the issue but none seeing a significant problem, or connecting the ignition problem to the airbags, or taking it to top management.
"Pieces of information and clues did not get put together," Barra said.
Still, she underscored, the Valukas report found there was "no conspiracy by the corporation to cover up facts."
The report cleared Barra and GM executive vice president Mark Reuss, her right-hand-man, of blame in the saga. Barra, a long-time GM veteran, only learned of the ignition problem, but not the deaths linked to it, in late December last year, just weeks before she became chief executive.
Since the first recall in February GM has plumbed deeply into its safety files and initiated recalls of more than 15 million cars, in an effort to ward off fresh scandals and begin rebuilding the company's battered reputation.
Barra said there are likely more recalls in store in the near future, and that an "aggressive" stance on product recalls is "the new norm" at GM.
But US Senator Richard Blumenthal, a critic of GM's handling of the scandal, said the company "has yet to come clean" about the delayed ignition recall.
He called the Valukas probe "the best report money can buy."
"It absolves upper management" and "leaves really critical questions unanswered," he told reporters.
"Clearly this (report) is not independent or completely objective."
GM's share price fell 0.7 percent to $36.27 Thursday, and was down 11.3 percent since the beginning of the year.


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