GM CEO Promises to "Fix the Failures in Our System"

Mary Barra said 15 employees have been fired

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    NEWSLETTERS

    An internal investigation by attorney Anton Valukas says "a pattern of incompetence and neglect" at General Motors that led to an 11 year delay in the recall of the Chevrolet Cobalt of faulty ignition switches. NBC 5's Phil Rogers reports.

    GM CEO Mary Barra said Thursday that 15 employees have been fired and five others have been disciplined over the company's failure to disclose a defect with ignition switches that is now linked to at least 13 deaths.

    The company also will form a compensation program for families of victims and those who suffered serious injuries in accidents related to the switches. The program is expected to begin taking claims Aug. 1.

    Barra called the investigation by former Chicago U.S. Attorney Anton Valukas "brutally tough and deeply troubling." It took GM more than a decade to report the deadly switch failures.

    "I hate sharing this with you just as much as you hate hearing it,'" Barra told employees in a town hall meeting at GM's suburban Detroit technical center. "But I want you to hear it. I want you to remember it. I want you to never forget it."

    Barra promised to "fix the failures in our system."

    Barra says attorney Valukas interviewed 230 employees and reviewed 41 million documents to produce the report, which also makes recommendations to avoid future safety problems.

    The crisis began in February, when GM recalled 780,000 older-model Chevrolet Cobalt and Pontiac G5 small cars because of defective ignition switches. GM soon added the Saturn Ion and other small cars to the recall, which ballooned to 2.6 million cars worldwide.

    The switches in the cars can slip out of the "run" position and shut down the engine. That disables the power-assisted steering and brakes and can cause drivers to lose control. It also disables the air bags. GM says at least 13 people have died in crashes linked to the problem, but trial lawyers suing the company put the death toll closer to 60.

    Valukas called the decision to install the switch "catastrophic."

    "A GM engineer chose to use an ignition switch in certain cars that was so far below GM’s own specifications that it failed to keep the car powered on," he wrote, noting the problems were known within the GM engineering ranks at the earliest stages of production.

    "Group after group, committee after committee" failed to act on the problem, the report noted. "It was an example of what one top executive described as the ‘GM nod’, when everyone nods in agreement to a proposed plan of action, but then leaves the room and does nothing."

    Valukas found that over several years, GM considered the ignition issue a "customer convenience" issue, not a safety defect. Indeed, even the GM product investigations group, charged with identifying and remedying safety issues opened and closed an investigation in a single month in 2005, finding no safety issue to be remedied.

    In contrast, the Wisconsin Safety Patrol (state police) and a team from the University of Indiana both figured out the connection between the ignition switch and airbag failures. Even a reviewer from the New York Times noted the sudden stalling of a test vehicle he had been given in 2005.

    Last month, GM paid a $35 million fine -- the largest ever assessed by the National Highway Traffic Safety Administration -- for failing to report the problem quickly to federal regulators. GM knew about problems with the ignition switches as early as 2001, and in 2005 it told dealers to tell owners to take excess items off their key chains so they wouldn't drag down the ignition switch.

    In 2006, an engineer at GM approved a change in the switch design, but didn't inform the government or change the corresponding part number. In subsequent years, that made it harder for other GM engineers to figure out why older Cobalts performed worse than newer ones.

    "We obviously contend there was a fraud committed," said Chicago attorney Shannon McNulty of the Clifford Law Office, who represents three car owners who are suing GM. "It’s really unbelievable that only this engineer would have that level of authority over this one component part."

    The Associated Press contributed to this report.