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World/National News

June 6, 2014

GM ousts 15 employees over ignition-switch scandal

(Continued)

In 2005, according to documents supplied recently to Congress, GM failed to make a repair of the switch that would have cost just 57 cents.

In his report, Valukas said he found no evidence that any employee made “an explicit trade-off between safety and cost” in dealing with the switch. But he said there was “tremendous cost pressure” at GM at the time, and he left open the possibility that it influenced the automaker’s handling of the problem.

The report could hurt GM in legal proceedings and complicate matters for lawyer Kenneth Feinberg, the compensation expert hired by GM to settle some of the many lawsuits, said Carl Tobias, a law professor and product liability specialist at the University of Richmond in Virginia.

But plaintiffs’ lawyers already know most of what’s in the report from depositions in previous cases, and Valukas was “careful not to open too much liability exposure,” Tobias said.

Under a judge’s order, GM is shielded from legal claims from before it emerged from bankruptcy in 2009, and company officials wouldn’t say Thursday whether they will use that protection against death and injury lawsuits. Lawyers are trying to overturn the shield, alleging GM deceived the judge.

Barra, who took over as CEO in mid-January, didn’t directly answer a question about whether she should have figured out the switches were a deadly problem. Before the took the top job, she was product development chief for three years, and safety reported to her through GM’s chain of command.

“I wish I had known, because the minute we knew, we took action,” she said.

Sen. Richard Blumenthal, D-Conn., criticized the investigation as “the best report money can buy.”

“It absolves upper management, denies deliberate wrongdoing and dismisses corporate culpability,” he said.

Barra said Valukas interviewed 230 employees and reviewed 41 million documents to produce the report, which also makes numerous recommendations for handling safety problems more effectively.

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