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GM fires 15 employees over recall scandal

Carmaker's action comes after investigation blamed deadly ignition-switch scandal on "pattern of incompetence".

Last updated: 06 Jun 2014 09:09
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GM chief executive Mary Barra called the report 'brutally tough and deeply troubling' [Getty Images]

General Motors (GM) has said it has forced out 15 employees over their role in a deadly ignition-switch scandal and will set up a compensation fund for crash victims.

An internal investigation blamed the debacle on engineering ignorance and bureaucratic dithering, not a deliberate cover-up.

GM took more than a decade to recall 2.6 million cars with bad switches that are now linked to at least 13 deaths by the US carmaker's count, the AP news agency reported.

"Group after group and committee after committee within GM that reviewed the issue failed to take action or acted too slowly," Anton Valukas, the former federal prosecutor hired by the company to investigate the reason for the delay, said in a 315-page report.

"Although everyone had responsibility to fix the problem, nobody took responsibility."

GM chief executive Mary Barra said on Thursday that more than half the 15 employees forced out were senior legal and engineering executives who failed to disclose the defect and were part of a "pattern of incompetence".

Five other employees have been disciplined, she said, without identifying any of them.

Barra called the report "brutally tough and deeply troubling".

The company said it would establish a compensation programme covering those killed or seriously injured in the more than 50 accidents blamed on the switches.

GM did not say how much money will be involved, but a Wall Street analyst estimated the payouts will total $1.5bn.

'Brutally tough'

The report lays bare a company that operated in "silos", with employees who did not share information and did not take responsibility for problems or treat them with any urgency.

Valukas also portrayed a corporate culture in which there was heavy pressure to keep costs down, a reluctance to report problems up the chain of command, a skittishness about putting safety concerns on paper, and general bureaucratic resistance to change.

He described what was known as the "GM nod", in which "everyone nods in agreement to a proposed plan of action but then leaves the room and does nothing".

Valukas cleared Barra and two other top executives, Mark Reuss, chief of global product development, and general counsel Michael Millikin, saying there is no evidence they knew about the problems any earlier than last December.

Possible criminal charges

Since February, GM has recalled 2.6 million older-model Chevrolet Cobalts, Saturn Ions and other small cars because their ignitions can slip out of the "run" position and shut off the engine.

That disables the power-assisted steering and brakes, making it difficult to control the car, and deactivates the air bags.

Trial lawyers suing the company put the death toll at more than 60.

"It's somewhat comforting to realise that they do know that some things were done incorrectly and they're aware of that," said Ken Rimer, whose 18-year-old stepdaughter, Natasha Weigel, was killed in a 2006 Cobalt crash in Wisconsin. 

"They made the appropriate measures to make sure it doesn't happen again."

Last month, GM paid a record $35m fine for failing to promptly report the bad ignition switches to federal highway safety regulators.

Federal prosecutors are also investigating, and could bring criminal charges against the company and some of its employees.

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