friday, 6 june of 2014

GM accepts ´troubling´ report on Chevrolet Cobalt recall


GM accepts 'troubling' report on Chevrolet Cobalt recall

General Motors (GM) has accepted the findings of a "brutally tough, deeply troubling" report into recalls of its Chevrolet Cobalt over ignition problems which have been linked to 13 deaths.

GM also said it would launch a compensation fund for crash victims and their families.

Chief executive Mary Barra said the report, which was carried out by former US Attorney Anton Valukas, found "the Cobalt saga was riddled with failures".

She said 15 employees have been fired.

About half of these were senior legal or engineering executives, said the company.

Five other workers who acted "inappropriately" have been disciplined.

To date, the firm has recalled 2.6 million cars with the defective switch.

No cover-up

It took the carmaker more than a decade to report the ignition switch failures, in which the switch can slip out of the "run" position and effectively shut down the car, causing the driver to lose control.

Although the problem has been linked to 13 deaths so far, lawyers for victims put the total at closer to 60.

Ms Barra, in announcing the results of Mr Valukas's report which involved over 200 employee interviews and more than 40 million documents, promised to "fix the failures in our system".

However, in a statement, GM emphasized that the report had found no conspiracy or cover-up.

"The Valukas report confirmed that Mary Barra, [and other GM executives] 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 January 31, 2014," GM chairman Tim Solso said.

Last month, GM paid a $35m fine - the maximum allowed by US law - for its failure to report the ignition switch problems in a timely manner.

'Nasty earthquake'

Analysts said that GM was hoping this report would be the final word on the matter.

"I think GM would love to make this the end," senior editor John O'Dell told the BBC, but he added that that was highly unlikely.

"If you're outside the company, it's pretty difficult to understand how very top people could have been ignorant of what was going on for so long," he said, noting that the US Congress was still planning hearings on the matter.

Mr O'Dell said that either way, the botched recall and subsequent fines would lead to a culture shift at GM.

"Sometimes it takes a nasty earthquake to shake things up and this was a pretty nasty earthquake."

Crash fund

The compensation fund will be run by Kenneth Feinberg, who also led claims processing in the wake of September 11 and the BP oil disaster in the Gulf of Mexico.

"I will be spending the next few weeks seeking advice and input from all interested parties as to the terms and conditions of such a programme," said Mr Feinberg in a statement.

He said the fund would start taking claims on 1 August.

Shares in the US car giant barely budged in the wake of the report.

Earlier this week, it reported its best May sales in seven years.

(Published by BBC – June 5, 2014)

latest top stories

subscribe |  contact us |  sponsors |  migalhas in portuguese |  migalhas latinoamérica