General Motors CEO: Company Attitudes and Practices Will Change Immediately

Barra said 15 individuals who were determined to have acted inappropriately are no longer with the company.

General Motors CEO Mary Barra described the Valukas findings as "extremely thorough, brutally tough, and deeply troubling." Photo Courtesy: General Motors

(DETROIT, Mich. ) - General Motors CEO Mary Barra said today that GM has received the findings of an investigation by former U.S. Attorney Anton Valukas into the Cobalt ignition switch recall and plans to act on all of its recommendations.

She again expressed deep sympathy for the victims of accidents related to the ignition switch defect and their families. In addition, Barra announced that Kenneth Feinberg will administer a compensation program for those who have lost loved ones or who have suffered serious physical injuries as the result of an ignition switch failure in recently recalled vehicles.

Barra described the Valukas findings as "extremely thorough, brutally tough, and deeply troubling."

“Overall the report found that, from start to finish, the Cobalt saga was riddled with failures which led to tragic results for many,” Barra said, noting that the report revealed no conspiracy by the company to cover up the facts and no evidence that any employee made a trade-off between safety and cost.

Barra said 15 individuals who were determined to have acted inappropriately are no longer with the company. Disciplinary actions have been taken against five other employees.

GM Chairman Tim Solso said the Board of Directors has been working closely with the management team to get the facts on the ignition switch issue and to see that changes are made to prevent such a tragedy from ever happening again.

“The Board engaged Anton Valukas to investigate and determine what went wrong while already working with GM’s leadership to make necessary changes,” Solso said. “We have received and reviewed Valukas’ very thorough report and are continuing to work with management to oversee the implementation of the recommendations contained in the report.

“In addition, the Board also retained independent counsel to advise us with respect to this situation and governance and risk management issues. We will establish a stand-alone risk committee to assist in overseeing these efforts.” Solso said. “The Board, like management, is committed to changing the company’s culture and processes to ensure that the problems described in the Valukas report never happen again.

“The Valukas report confirmed that Mary Barra, Mike Millikin and Mark Reuss did not learn about the ignition switch safety issues and the delay in addressing them until after the decision to issue a recall was made on Jan. 31, 2014,” Solso said.

Barra emphasized to employees that the company has adopted and will continue to adopt sweeping changes in the way it handles safety issues. The actions to date include:

• Appointing Jeff Boyer as Vice President of Global Vehicle Safety, elevating and integrating GM’s safety processes under a single leader
• Adding 35 product safety investigators that will allow GM to identify and address issues much more quickly
• Instituting the Speak up for Safety program encouraging employees to report potential safety issues quickly and forcefully
• Creating a new Global Product Integrity organization to enhance overall safety and quality performance, and
• Restructuring the recall decision making process to raise it to the highest levels of the company.

In her remarks to employees, Barra said she is committed to leading "in a way that brings honor and respect to this company.

"Together, we have to understand that the attitudes and practices that allowed this failure to occur will not be tolerated,” she said. “Also, if we think that cleaning up this problem and making a few process changes will be enough, we are badly mistaken. Our job is not just to fix the problem. Our job must be to set a new industry standard for safety, quality, and excellence.”

General Motors also announced it will implement a compensation program for those who have lost loved ones or who have suffered serious physical injuries as the result of an ignition switch failure in recently recalled vehicles.

“We are taking responsibility for what has happened by taking steps to treat these victims and their families with compassion, decency and fairness,” said GM CEO Mary Barra. “We made serious mistakes in the past and as a result we’re making significant changes in our company to ensure they never happen again.”

The program will be independently administered by Kenneth Feinberg, who is highly regarded for his handling of other significant compensation programs.

The program is expected to cover approximately 1.6 million model-year 2003-2007 recalled vehicles manufactured with an ignition switch defect and approximately 1 million model year 2008-2011 recalled vehicles that may have been repaired with a recalled ignition switch.

Pending the independent administrator’s development of final guidelines for the compensation program, GM currently expects the program will begin to accept claims on Aug. 1, 2014. It is GM’s understanding that the administrator’s final compensation program guidelines will be developed in the coming weeks and will include details on where and how to apply for compensation.

Source: General Motors