[June 05, 2014]
(Reuters) - An internal
probe of General Motors Co's GM.N delay in recalling
cars with defective ignition switches linked to at least
13 deaths is expected to conclude there was no concerted
coverup and clear senior management of blame, the Wall
Street Journal reported, citing people familiar with the
matter.
The probe is expected to conclude that CEO Mary Barra, executives
who reported directly to her, the board of directors and former CEO
Dan Akerson did not know about the defective switches before
December 2013, the newspaper said, citing the people.
The report will conclude that GM managers did not make connections
and act on evidence of problems linked to deadly accidents, and it
will recommend changes to GM culture and management, the Journal
said. (http://r.reuters.com/qah89v)
GM is expected to announce the dismissal of "a number of people,"
including the engineer who designed the ignition switch, Raymond
DeGiorgio, and some members of the company's legal department, the
newspaper said.
But GM's general counsel, Michael Millikin, who was co-lead of the
internal probe with former U.S. prosecutor Anton Valukas, is
expected to continue to work for the automaker and is cleared of
responsibility for the mishandling of defects and the recall delay,
the people told the newspaper.
Barra is expected to announce the findings of the internal probe on
Thursday. The No.1 U.S. automaker has recalled 2.6 million cars
because of the switches, which GM engineers have known about for
more than a decade.
In the wake of the internal report, the GM board is expected to form
an operational risk-management committee, the Journal said.
GM spokesman Greg Martin did not immediately respond to an email
seeking comment.
GM faces investigations by Congress, the Justice Department, the
Securities and Exchange Commission and several states. It has also
been sued by families of crash victims and investors, all of whom
are likely to pour over GM's report for evidence to back their
claims.
On May 16, GM was fined $35 million for its delayed response to the
defect, the maximum that can be imposed by the U.S. Department of
Transportation. (Full Story)
The faulty switches are in older, inexpensive models such as the
Saturn Ion and Chevrolet Cobalt. (Full Story) GM began recalling the
cars in February.
The defective switches, which are cheap to fix, can unexpectedly
turn from the "on" position to the "accessory" position, causing
engines to stall, airbags to fail during crashes and power steering
and power brakes to malfunction.
While the carmaker has acknowledged 13 deaths related to the
ignition switches, the National Highway Traffic Safety
Administration has said the number likely could be higher.
Reuters reported on Monday that at least 74 people have died in
crashes similar to those GM has linked to the faulty switches, based
on an analysis of government data. (Full Story)
The largest U.S. automaker has made several changes to its
organizational structure since the recall, saying it would improve
vehicle quality and safety. The company also has announced the exit
of several executives in moves it said were unrelated. (Full Story)
In addition to naming a global vehicle safety chief in March to
improve the process for catching defects and calling for recalls
sooner, GM split its engineering division into two units the
following month and assigned one of its top attorneys to advise the
new safety chief on legal issues.
Valukas, co-lead of the probe, is well respected for his
investigation of Lehman Brothers after the financial services firm
collapsed in 2008. He alleged then that Lehman used accounting
gimmicks and had been insolvent for weeks before it filed for
bankruptcy.
But the law firm of which he is chairman, Jenner & Block, has worked
with GM since 2002, and at least two of the automaker's former top
attorneys, Robert Osborne and Elmer Johnson, were partners at the
Chicago law firm.
That led to questions of conflict of interest for the law firm, when
the probe was announced in March. GM at the time said there was no
such issue and that Valukas had been charged to go "where the facts
take him."
(Reporting by Supriya Kurane and Ankush Sharma in Bangalore and
Peter Henderson in San Francisco; Editing by Gopakumar Warrier and
Matt Driskill)
