A scathing internal report released by General Motors (GM) indicates that lives could have been saved if faulty ignition switches placed on Chevrolet Cobalts and Saturn Ions had been recalled when it was first discovered that they did not live up to specifications over a decade ago. Former U.S. Attorney Anton Valukas, who headed the investigation, submitted his 325 page report to the National Highway and Safety Administration (NHTSA) on May, 29, 2014. GM has opened a fund to compensate families that lost loved ones.

The engineer, 61 year old Ray DeGiorgio, who approved the switches for production has now been fired along with 14 other employees. It is not entirely clear why the other employees were fired; after interviewing hundreds of witnesses no other GM personnel could be identified as knowing the switches were faulty before 2013. Valukas was able to uncover e-mails between DeGiorgio and Delphi, the supplier working on the ignition switches, as far back as 2002, that make it clear that DeGiorgio knew there were problems but chose to go forward instead of delay production to replace the part. The report does indicate, however, that neither the engineer nor the company was aware that the faulty switch would cause air bags not to deploy in a crash, which in turn endangered thousands of drivers, killed 13, and injured many. The company had only issued a global recall of 2.6 million Saturn Ions and Chevrolet Cobalts over the faulty ignition switches earlier this year.
In his report, Valukas recommends that GM make several changes both cultural and practical to ensure that a deadly, costly, and embarrassing mistake like this never happens again.

Corporate Changes Recommended

  • The board should receive quarterly reports on production.
  • Safety must be “embedded in the fabric of the organization.”
  • Employees need to understand that they have an obligation to raise concerns about safety and speak up until they are heard.
  • A plan needs to be put in place to ensure that executives all the way to the CEO are aware of safety concerns being raised at the production level.

The United States Department of Transportation recently announced that GM has agreed to pay a record, maximum $35 million civil penalty for violating federal safety laws by not reporting a safety issue to the Federal Government in a timely manner, and also to have unprecedented oversight requirements while the investigation is underway. The agreement, made in a Consent Order with the NHTSA, orders GM to make broad internal changes to how it handles reviews of safety-related issues and to improve its ability to decipher possible consequences to product defects in the United States. GM is also obligated to pay additional civil penalties for failing to respond on time to the agency’s document demands during NHTSA’s investigation. Federal law requires auto manufacturers to notify NHTSA within five business days of determining that a safety-related product defect exists or that a vehicle is not in compliance with federal motor vehicle safety standards and to issue a recall in a timely manner.

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