The Valukas report has received a great deal of media attention since it was released last month. Even though it was a rush job, the findings don’t paint a pretty picture of General Motors or the automaker’s conduct. The June 9 edition of the Montgomery Advertiser contained an excellent editorial relating to the GM ignition switch problems and the so-called independent report done for the automaker. The editorial points out how truly bad GM has been for more than a decade. It also points out that there is much left unsaid and unanswered in the report.
“NOD” NO OPTION FOR GM
The internal report on GM’s decade-long failure to recall cars with a deadly safety hazard is not the whitewash that many critics predicted. The report details an appalling culture of incompetence and irresponsibility inside one of America’s once-great corporations. Its defining characteristic was something known as the “GM nod,” described as “when everyone nods in agreement to a proposed plan of action, but then leaves the room with no intention to follow through.” That nodding contributed to at least 13 deaths in more than 50 crashes.
GM CEO Mary Barra vowed to change the culture and was quick to point out that the report does not reveal a “conspiracy by the corporation to cover up the facts.” Maybe not, but it certainly describes a company that ignored warnings about the faulty ignition switch that contributed to those crashes. The switches were left in millions of Cobalts and other models.
Among the damning particulars:
• The GM engineer who designed the ignition switch called it the “switch from hell” before the car went on the market. The switch was redesigned, but it still fell below GM’s specifications. The company installed it anyway.
• GM classified sudden stalls at highway speeds as an “issue of customer satisfaction, not safety.” Really? Have these people never driven a car? GM’s decision meant the cars did not have to be recalled, and money did not have to be spent to fix them.
• By 2011, one of GM’s outside lawyers had repeatedly warned that the company “could be accused of egregious conduct” in lawsuits because of its failure to address airbags that didn’t deploy in Cobalt crashes. By then, several people had died. GM’s response? More meetings and investigations.
Since the scandal exploded in February, GM has dutifully followed the PR playbook for powerful institutions caught up in similar firestorms. Act penitent. Commission an “independent” investigation headed by someone close to the company. Issue a toughly worded report. Accept its recommendations. Roll some heads, preferably lower level ones. Promise a new, customer-focused beginning. Barra struck the right tone about change, but the test of GM’s sincerity will be its actions.
Yes, 20 employees were fired or disciplined. But Barra would not say who they are or what positions they held. Were they given severance packages? Did they sign non-disclosure agreements? If there’s nothing more to hide, why continue the secrecy? GM promises compensation for victims of “ignition switch failures.” That shouldn’t be limited to the 13 who died in crashes where airbags failed to deploy. GM says it’ll leave it up to Kenneth Feinberg, its independent administrator. Good. Thursday’s report is hardly the last word. The Justice Department and Congress are still investigating, and lawmakers are pushing tough safety measures. Whether the company lobbies for or against such changes will say a lot about whether this is truly a “new GM,” or just the old GM with a new paint job.
There is a great deal yet to be uncovered and answered in the GM litigation. The automaker is fighting hard to avoid putting key folks up for deposition in the pending civil lawsuits and especially in the Melton case. . We are fighting equally hard to start the discovery process. Hopefully, it will start very soon.
Source: USA Today
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