GM plans no more dismissals linked to switch recall: CEO

DETROIT Tue Jun 10, 2014 10:49am EDT

1 of 3. General Motors CEO Mary Barra holds a media briefing before the start of GM's Annual Shareholders Meeting at the GM World Headquarters in Detroit June 10, 2014.

Credit: Reuters/Rebecca Cook

DETROIT (Reuters) - General Motors Co does not plan more employee dismissals relating to the company's handling of a defective ignition switch linked to at least 13 deaths, Chief Executive Mary Barra said on Tuesday.

"We feel we've taken the appropriate actions as it relates to the ignition switch recall," Barra told reporters ahead of an annual shareholders meeting, when asked whether GM would dismiss or discipline any more staff for the company's poor handling of the faulty part.

Since early this year, the Detroit automaker has been enveloped in a scandal over why it took more than a decade to begin recalling low-cost Chevrolet Cobalts, Saturn Ions and other cars with ignition-switch problems that were causing them to stall during operation.

When those engines stalled, air bags failed to deploy during crashes - some of them fatal - and drivers struggled to control their vehicles as power steering and brake systems malfunctioned.

GM fired 15 employees last week and another five were disciplined due to their handling of the switch recall. The company announced the departures along with the results of an internal probe.

Speaking to just 29 shareholders at the company's headquarters on Tuesday, Barra reiterated that GM would announce "a few more recalls" in the near term.

Chairman Tim Solso said the board of directors had complete confidence in Barra and her team to lead the company.

No shareholder brought up the recall during the question and answer portion of the meeting, which lasted about 20 minutes. The company has said all recalls so far this year would cost it $1.7 billion. GM previously said an immaterial amount of additional costs would be accounted for in the second quarter.

Barra said the report on the internal investigation would be a fulcrum for change.

"It's not about putting behind us, it's about using the learnings and the failing that we had, to make sure that we improve the whole development process and the culture, which we're continuing to work on," she said.

The company has said it will set up a fund to compensate victims and the families of victims of crashes that were linked to the faulty switches. Fund administrator Kenneth Feinberg will determine the number of deaths linked to the switches and the amount of compensation.

Barra said on Tuesday the GM will have a better feel for the financial impact of the fund once Feinberg has set the parameters and the company could have an estimate at the end of the month.

Barra said last week that of the 15 dismissed, "some were removed because of what we consider misconduct or incompetence. Others have been relieved because they simply didn't do enough. "GM still faces probes by the U.S. Congress, Department of Justice and other federal and state agencies into why it did not announce vehicle recalls to fix the problem until this past February.

(Editing by Bernadette Baum and Marguerita Choy)

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Comments (4)
209flyboy wrote:
Who was fired? Engineers who designed the switch (who have probably since left the company)? quality control people who tested, inspected and approved the switch? those who knew the problems but kept them quiet or the managers who were paid big bucks to make sure the product was ok? Anybody going to jail as a result of the deaths? (probably not) This problem wasn’t new. It had been reported years ago and apparently no one did anything. Follow the money!

Jun 10, 2014 10:32am EDT  --  Report as abuse
209flyboy wrote:
Who was fired? Engineers who designed the switch (who have probably since left the company)? quality control people who tested, inspected and approved the switch? those who knew the problems but kept them quiet or the managers who were paid big bucks to make sure the product was ok? Anybody going to jail as a result of the deaths? (probably not) This problem wasn’t new. It had been reported years ago and apparently no one did anything. Follow the money!

Jun 10, 2014 10:32am EDT  --  Report as abuse
209flyboy wrote:
Who was fired? Engineers who designed the switch (who have probably since left the company)? quality control people who tested, inspected and approved the switch? those who knew the problems but kept them quiet or the managers who were paid big bucks to make sure the product was ok? Anybody going to jail as a result of the deaths? (probably not) This problem wasn’t new. It had been reported years ago and apparently no one did anything. Follow the money!

Jun 10, 2014 10:32am EDT  --  Report as abuse
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