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GM dismisses 15 employees after ‘deeply troubling’ recall report

General Motors Chief Executive Mary Barra for weeks has dodged serious question about the automaker’s handling on recall of cars linked to at least 13 deaths, that she would wait for the results of a month-long internal investigation.

GM dismisses 15 employees after ‘deeply troubling’ recall report-slide0
Photo by Bill Pugliano/Getty Images
The 325-page report, described by Barra as “extremely thorough and brutally tough,”
Photo by Bill Pugliano/Getty Images

However those findings, by GM’s outside Counsel Anton Valukas of Jenner & Block, proved less than definitive when released on Thursday.

In the early investigation of the recall, a key question has been raised as to why the company redesigned the defective ignition switch linked to crashes but did not follow industry practice of changing the part number at the same time.

In April, congressional hearing was conducted. However, Barra was unable to explain the decision. Valukas addressed the circumstances surrounding the part change in detail, and mainly blamed switch designer Ray DeGiorio, who was among the 15 employees dismissed by GM after the probe. And there was no explanation about the decision. On Thursday, Barra said she cannot speculate the reason behind.

The 325-page report, described by Barra as “extremely thorough and brutally tough,” was particularly critical of GM’s legal department. However, GM’s top lawyer, General Counsel Millikin, did not know about the details of the switch until this year.

William Kemp, an attorney, who worked for years on the switch issue, was asked why he waited until this February to tell his boss about it. “He could not explain why he did not raise it with Millikin earlier and in hindsight says he probably should have,” the report concludes.

Barra, on Thursday, said Millikin, 65, still remains general counsel. Kemp is among the 15 GM employees dismissed with respect to investigation, according to a GM source familiar with the situation. GM declined to make Millikin available.

Questions still remained unanswered what role Millikin played in the internal probe, if any. Barra announced the start of the investigation in early March, GM said that Millikin would co-lead it with Valukas. Some observers raised some eyebrows that there was a conflict of interest. On Thursday, a GM spokesman said that both report and the investigation were solely the work of Valukas and the company declined to explain why Millikin is not part of it.

The report did not disclose the number of legal settlements. GM has reached with families of crash victims, nor did it offer a final count on fatalities. GM, on Thursday, said lawyer Kenneth Feinberg, who is designing the victims’ compensation fund for GM, would determine the number of deaths linked to the switch.

Valukas said that GM engineered, and lawyers for years didn’t connect the defective switch with the safety issues surrounding non-deployment of air bags in Chevrolet Cobalt and Saturn Ions. However, the report did not say on what basis GM attorneys approved its legal settlements with victims’ families.

Valuka also raised questions about the whereabouts of both key paperwork from GM engineers, and switch supplier Delphi was required to sign off on the design of the original ignition switch in 2002. The investigation confirmed that the switch did not meet its GM’s own performance specifications. However, the approval form was missing from the files of GM as well as Delphi. Delphi was obligated to keep a copy, the report said. Delphi did not respond immediately to a request for comment

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