* Barra learned of ignition-switch issue two weeks after
* Lawyer leading probe investigated Lehman collapse
* U.S. safety regulators also investigating GM's handling of
* Two outside law firms in probe have conducted work for GM
By Ben Klayman
DETROIT, March 10 In her first big test as
General Motors Co's chief executive, Mary Barra has taken
a hands-on approach behind the scenes in directing the
automaker's response to ignition-switch problems that have been
linked to 13 deaths.
On Monday, GM said the team conducting an internal probe
ordered up by Barra of the recall of more than 1.6 million
vehicles is being led by the lawyer who investigated Lehman
Brothers after the financial services firm collapsed in 2008.
Barra has been heavily focused on the recall since she
learned of the issue in late January, about two weeks after she
took over as the industry's first female CEO.
The No. 1 U.S. automaker has said the recall to correct a
condition that may allow the engine and other components,
including front airbags, to be unintentionally turned off will
begin next month when it has the replacement parts. Most of the
affected vehicles are in North America.
Barra apologized for the recall and sent a letter last week
to employees promising an "unvarnished" look at the recall that
is occurring 10 years after the issue first came to light. She
has not granted any interviews on the matter.
"Mary believes that her time is best spent on making the
recall work as smoothly as possible for our customers," GM chief
spokesman Selim Bingol said in an email. "Meanwhile, GM is
keeping our customers informed about the recall while working to
provide timely responses to questions from regulators."
While recalls are not unusual, the number of fatalities
involved and the way GM handled this one stretching over the
past decade has the potential to cost the company hundreds of
millions of dollars in fines and possible legal damages, in
addition to tarnishing its reputation.
U.S. safety regulators have also opened an investigation
into whether GM reacted swiftly enough. The National Highway
Traffic Safety Administration sent the automaker a list of 107
questions about the recall to answer by April 3.
In addition to ordering up the apology and crafting the
letter to employees with Bingol's help, Barra has designated
assignments for top executives related to the recall, according
to a person familiar with the situation.
Barra placed global product development chief Mark Reuss in
charge of working with supplier Delphi Automotive to
obtain the replacement parts as quickly as possible and assigned
North American head Alan Batey to work with GM dealers on
serving the customers, said the person, who asked not to be
identified discussing the recall.
She also involved GM quality and customer service chief
Alicia Boler-Davis as well as Bingol, who is in charge of GM's
governmental affairs in Washington, the person said.
LAWYER IN LEHMAN PROBE TAPPED
Anton "Tony" Valukas has been named head of GM's internal
probe. He is chairman of the law firm Jenner & Block, whose
attorneys are helping with the investigation of the recall.
Valukas could not immediately be reached for comment.
Co-leading the investigation with Valukas is the automaker's
general counsel, Michael Millikin.
Sources previously said GM's team of investigators had begun
interviewing employees involved in the problems surrounding the
ignition switch, which first came to the company's attention in
Valukas, a former U.S. attorney, was the court-appointed
examiner in the Lehman Brothers bankruptcy. His probe resulted
in the so-called Valukas report, a 2,200-page document released
in 2010 which detailed the causes of the financial services
firm's spectacular collapse.
The report showed how Lehman had long used accounting
gimmicks to bolster its balance sheet, and had been insolvent
for many weeks prior to its Sept. 15, 2008, bankruptcy filing.
It did not find extensive wrongdoing at the Wall Street bank.
GM went through a U.S. government-led bankruptcy in 2009,
which is the dividing line between what became known as "old GM"
and "new GM."
Valukas also served as lead counsel for the U.S. Securities
and Exchange Commission's four-year investigation of "old" GM's
pension accounting, which concluded with no allegations of fraud
or intentional misconduct.
Jenner & Block, which is based in Chicago, was the lead
outside counsel for GM's initial public offering in 2010 when it
returned to the market as a public company following its
bankruptcy restructuring. Another lawyer who works at Jenner is
Robert Osborne, GM's general counsel from 2006 to 2009.
The law firm referred questions to GM.
In addition, GM said lawyers from the firm King & Spalding
are also part of the team investigating the recall. The firm
also referred questions to GM.
King & Spalding, founded in Atlanta, represented "new" GM
during some of its bankruptcy proceedings, in addition to some
other litigation work since then. Partners at the firm include
Gary Grindler, the former U.S. deputy attorney general under
Regarding the ignition-switch issue, GM previously said the
weight on the key ring, road conditions or some other jarring
event may cause the ignition switch to move out of the "run"
position, turning off the engine and most of the car's
electrical components. GM has recommended that owners use only
the ignition key with nothing else on the key ring.
The company said last week that the initial replacement
parts will be available in early April.