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Thu June 5, 2014
GM CEO says "pattern of incompetence and neglect" led to ignition switch debacle
Update 3:30 p.m.
Texas attorney Bob Hilliard represents about 70 families suing GM in a variety of state and federal courts.
He says his clients were “stunned” to hear GM CEO Mary Barra admit the problem was a result of "incompetence and neglect."
“I don’t think that GM can come into a court of law anymore and argue it wasn’t their fault,” says Hilliard. He says the only thing GM can argue now is “what is the value of the loss.”
But Hilliard says he does worry GM will claim it's not liable for problems predating its bankruptcy. He cites a case involving a Pennsylvania man who was paralyzed from the chest down in an accident.
“In court they say GM did not design this vehicle. GM did not manufacture this vehicle. GM did not sell this vehicle. Even though this vehicle was a 2006 GM Cobalt,” says Hilliard.
Hilliard says he's "skeptical" about the victims’ compensation fund GM is offering to establish.
Update 10:34 a.m.
The much-anticipated report that looked into what went wrong at General Motors was given to federal regulators and Congress this morning.
GM executives held a press conference this morning about what the report found and how GM plans to respond.
This is a turning point in the ignition switch recall saga for GM.
CEO Mary Barra refused to answer detailed questions from the press and from Congress until Anton Valukis released the findings of his investigation.
The New York Times' Bill Vlasic writes that GM execs hope this report will relieve some pressure on the company:
Legal experts say that G.M. has taken a calculated risk that Mr. Valukas’s findings and recommendations will sufficiently answer the myriad questions hanging over the company.
“The downside is that members of Congress, the press and the public may think that the report lacks credibility if it is in an in-house investigation,” said Carl W. Tobias, a law professor at the University of Richmond.
But Professor Tobias said that Mr. Valukas, a former United States attorney, was a good choice for the delicate task of investigating G.M. “His reputation is on the line with this report, so he is not likely to sacrifice that for G.M.,” he said.
But this is just another step in the grand mea culpa for GM.
Vlasic reports the company faces more Congressional hearings, more investigations from the U.S. Justice Department and the Securities and Exchange Commission, and it will need to compensate the families of the victims of the ignition switch problems:
... the company is awaiting recommendations from the lawyer Kenneth R. Feinberg on how it will compensate victims of switch-related crashes and family members of people who died as a result of the defect. G.M. faces hundreds of private claims and lawsuits.
Mr. Feinberg, who oversaw compensation claims for victims of the 9/11 terrorist attacks and the Boston Marathon bombing, has said he would make his recommendations to G.M. later this month.
To see how this crisis unfolded for GM, check out this timeline from NPR's Tanya Basu.
General Motors CEO Mary Barra says 15 employees have been fired over the company's recent ignition switch recalls.
Barra made the announcement this morning as she released an internal investigation by attorney Anton Valukis into the recall of 2.6 million older small cars for defective ignition switches.
Barra says the internal investigation into its recent ignition switch recall is "brutally tough and deeply troubling."
“What Valukis found in this situation was a pattern of incompetence and neglect,” Barra said. “Repeatedly, individuals failed to disclose critical pieces of information that could have fundamentally changed the lives of those impacted by the faulty ignition switch.”
It took GM more than a decade to report the switch failures, which it blames for 13 deaths.
In a town hall meeting at GM's suburban Detroit technical center, Barra says attorney Anton Valukas interviewed 230 employees and reviewed 41 million documents to produce the report, which makes recommendations to avoid future safety problems.