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2002 whistleblower makes GM aware of ignition issue, firm does nothing

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Following weeks of hearings, grand orations, promises to “get to the bottom” of the issue, lawmakers in Washington actually have something they can sink their teeth into.

Whistleblower comes forward

A whistleblower has come forward with a letter he sent to the General Motors board of directors and senior management warning them of a potentially fatal ignition problem. The whistleblower, William McAleer, at the time of the issue -- 2002 -- GM's manager of the automaker's quality audit unit, told the board and executives that sales of all vehicles should be halted and those already sold should be recalled.

It seems as if GM's management has seemed trying to act as if it was taken totally by surprise by:

  • The bad ignition issue
  • The McAleer letter

They are reacting as if it is the first time they knew of the problem, however, that isn't quite the case, because McAleer wrote his letter in 2002, a full 12 years before the current recall/quality crisis besieging GM now. This issue has bumped the automaker's recall level to more than 20 million vehicles.

Key player

It is clear from the Reuters story that McAleer was a key player in the quality track at the automaker. After all, he was manager of the unit responsible for quality issues so it was his name and reputation on the line on each car or truck. It would stand to reason that he would ensure that if there was a problem it would be noted and the proper people would be notified.

He was apparently certain that this was within the purview of his quality unit, however, he indicated to Reuters that he was told that his team should stay out of safety issues.

Dealers promised repair kits

Dealers have also been promised fix-it kits, as the are the ones who will ultimately bear the brunt of the work, but, according to various sources in the automotive community now have yet been forthcoming.

Incidentally, according to reports arising from this issue, GM has sought to shift the blame everywhere but where it belongs, including to dealers. Dealers told many local news outlets across the country that no repair kits or instructions about repairs had been forthcoming from the automaker, though they promised such information and hardware as early as March and the repairs were supposed to have started by now.

Business as usual

Two questions seem to be arising from GM's general seeming lack of urgency in response to the Reuters investigation of the McAleer letter. They are:

  • Has GM been stonewalling the issue?
  • Has the automaker believed that if it acted as if it were the first time they had heard of the issue, people would believe their stand?

Perhaps it was because GM's new CEO Mary Barra, the first woman CEO in GM history, didn't believe GM's ongoing stance as she has been on the inside at GM and knows how the company does business, compounded by the fact that she has appeared before a congressional committee twice to discuss the issue.

Barra has appeared before the before at the House Transportation Committee whose members have promised “to get to the bottom” of the serious ignition issue that has affected the automaker for at least 12 years.

During her second stint before the panel, Barra made two promises that included:

  1. 1. She would address the ignition issue swiftly.
  2. 2. She would change the way GM does business no matter where it led.

Her testimony and that of former US Attorney Anton Valukas, who conducted a top-to-bottom review of General Motors and its business practices, promised major changes were at hand in the way GM would continue to do its business. Barra hired Valukas and apparently gave him a free hand.

GM investigates itself

The result, James Cain, GM spokesman, is that the automaker has “conducted what we believe is the most exhaustive and comprehensive review in the history of the company and that includes looking at the vehicles that were built in the late 1990s and if we find anything that is a safety issue we will act.”

The question that seems to be just below the surface; how can a major player like GM conduct an exhaustive review of itself? It may be that they are relying on the Valukas investigation, which is quite likely as the former US attorney wrote a scathing report for the new president of the besieged automaker.

Barra, who has already relieved 15 or more top executives of their positions, told Congress that she is planning wholesale changes from top to bottom in the way the automaker does its business.

The old ways still exist

Still, there are those who are dragging their feet as they try to find a scapegoat or scapegoats for this problem. In other words, the old ways of doing business at GM better known as the “We didn't do it, they did” school of management is proving hard to root out. At least their president, Mary Barra, a long-time veteran of GM, is willing to take a stand, but many executives still believe that by sidestepping and using double-talk they can escape the inevitable. It's not likely they will and if they do they may find themselves in charge of a three-cylinder engine line somewhere in Mexico.

Expensive issues involved

There, in a nutshell, is GM's corporate thinking. On one hand, there is a known problem – which GM has grudgingly been forced to answer by the National Highway Traffic Safety Administration (NHTSA). The problem involves force it takes to knock the ignition key out of the key ring and turn off the ignition. The other side of this same problem is the amount of weight it takes on the weight force on the key and key ring. It is possible to either knock the ignition key out of the steering column accidentally or to have it simply fall out of the ignition switch if there is too much weight on the key. In either case, once the ignition is turned off, the vehicle stops dead in its tracks. To date, 13 deaths have been attributed to this defect.

It is an expensive problem for which GM has already taken a chargeback for several hundred million dollars. By the time this is finished, it will likely cost GM a staggering figure in the billions of dollars.

Yet, even as Barra and Valukas were sitting in front of lawmakers in Washington last week, Cain was adroitly conducting GM's usual sidestep and stonewall.

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