• Sprott Money
    05/06/2016 - 06:03
    The US, in its own decline, is showing this same self-destructive tendency. The worse things get, the greater the inclination of the citizenry to say, “Carry on, everything’s fine.”

GM Fires 15, Disciplines 5 After "Deeply Troubling" Report

Tyler Durden's picture


Former U.S. Attorney Anton Valukas report on GM's SNAFU is proclaimed as "extremely thorough, brutally tough, and deeply troubling," by CEO Mary Barra; but finds no collusion or conspiracy to boost bottom line at the expense of customers' lives. However, the report did find "a pattern of incompetence" and actions must be taken...


Of course, none of this matters as easy credit is fueling the sale of more Kevorkianesque GM cars than ever before...

Full Statement:

General Motors CEO Mary Barra said today that GM has received the findings of an investigation by former U.S. Attorney Anton Valukas into the Cobalt ignition switch recall and plans to act on all of its recommendations.

She again expressed deep sympathy for the victims of accidents related to the ignition switch defect and their families. In addition, Barra announced that Kenneth Feinberg will administer a compensation program for those who have lost loved ones or who have suffered serious physical injuries as the result of an ignition switch failure in recently recalled vehicles.

Barra described the Valukas findings as "extremely thorough, brutally tough, and deeply troubling."

“Overall the report found that, from start to finish, the Cobalt saga was riddled with failures which led to tragic results for many,” Barra said, noting that the report revealed no conspiracy by the company to cover up the facts and no evidence that any employee made a trade-off between safety and cost.

Barra said 15 individuals who were determined to have acted inappropriately are no longer with the company. Disciplinary actions have been taken against five other employees.

GM Chairman Tim Solso said the Board of Directors has been working closely with the management team to get the facts on the ignition switch issue and to see that changes are made to prevent such a tragedy from ever happening again.

“The Board engaged Anton Valukas to investigate and determine what went wrong while already working with GM’s leadership to make necessary changes,” Solso said. “We have received and reviewed Valukas’ very thorough report and are continuing to work with management to oversee the implementation of the recommendations contained in the report.

“In addition, the Board also retained independent counsel to advise us with respect to this situation and governance and risk management issues. We will establish a stand-alone risk committee to assist in overseeing these efforts.” Solso said. “The Board, like management, is committed to changing the company’s culture and processes to ensure that the problems described in the Valukas report never happen again.

“The Valukas report confirmed that Mary Barra, Mike Millikin and Mark Reuss did not learn about the ignition switch safety issues and the delay in addressing them until after the decision to issue a recall was made on Jan. 31, 2014,” Solso said.

Barra emphasized to employees that the company has adopted and will continue to adopt sweeping changes in the way it handles safety issues. The actions to date include:

?Appointing Jeff Boyer as Vice President of Global Vehicle Safety, elevating and integrating GM’s safety processes under a single leader
?Adding 35 product safety investigators that will allow GM to identify and address issues much more quickly
?Instituting the Speak up for Safety program encouraging employees to report potential safety issues quickly and forcefully
?Creating a new Global Product Integrity organization to enhance overall safety and quality performance, and
?Restructuring the recall decision making process to raise it to the highest levels of the company.

In her remarks to employees, Barra said she is committed to leading "in a way that brings honor and respect to this company.

"Together, we have to understand that the attitudes and practices that allowed this failure to occur will not be tolerated,” she said. “Also, if we think that cleaning up this problem and making a few process changes will be enough, we are badly mistaken. Our job is not just to fix the problem. Our job must be to set a new industry standard for safety, quality, and excellence.”

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Thu, 06/05/2014 - 09:27 | 4826467 Bazza McKenzie
Bazza McKenzie's picture

Barra obviously went to the same school as Obama -- "I only know about it when it appears on the news".

Thu, 06/05/2014 - 09:32 | 4826496 Mr Pink
Mr Pink's picture

Duh, there is an easy explanation for this...


Thu, 06/05/2014 - 09:38 | 4826526 mvsjcl
mvsjcl's picture

'Barra described the Valukas findings as "extremely thorough, brutally tough, and deeply troubling."'


Undoubtedly, the exact opposite is meant.

Thu, 06/05/2014 - 10:18 | 4826680 666
666's picture

The families of the hundreds who died as a result of GM's incompetence can finally find peace knowing that 15 employees have been fired and 5 disciplined while the management, who knew nothing about this, remains unscathed.


Thu, 06/05/2014 - 10:51 | 4826785 Never One Roach
Never One Roach's picture

Firing peeples is unusually harsh, and even cruel these days. Usually they get off with a slap of the wrist and tiny monetary fine of some sort ... and then a promotion.

Thu, 06/05/2014 - 11:23 | 4826885 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Note they do not say which employees were fired and at which positions. I guarantee you those who were fired were lowly engineers who were told to shut the f*&k up in the past when they knew there were problems. Those who received the disciplinary actions (slaps on wrists) were the managers. The managers will move on up the ladder and the honest employees a destroyed career. Been there done that. 

Thu, 06/05/2014 - 19:48 | 4828509 gruden
gruden's picture

A friend of mine is an engineer at a major car company.  There ended up being a recall over a part he was responsible for.  They put him through hell.  He saved his job because he saved his emails. 

If you object, put it in writing, and hold onto it.  I'm willing to bet a few GM engineers saved their asses with documentation.

Thu, 06/05/2014 - 19:48 | 4828510 gruden
gruden's picture

Damn double post...

Thu, 06/05/2014 - 09:34 | 4826499 NotApplicable
NotApplicable's picture

So, recalls are issued before the defects are known? Sounds legit.

Thu, 06/05/2014 - 09:51 | 4826575 All is chosen
All is chosen's picture


Thu, 06/05/2014 - 09:34 | 4826503 BeerMe
BeerMe's picture

Sadly many consider this stuff great leadership qualities.  I must be doing it all wrong.

Thu, 06/05/2014 - 09:55 | 4826609 oklaboy
oklaboy's picture

Barra was the head of global supply chain, how could she not know? and a stint in enineering, what a crock of shit.

Thu, 06/05/2014 - 09:58 | 4826621 MountainsRoam
MountainsRoam's picture

Myself and family will never ever ever ever buy a GM product.. I made this decision with the bailout, all this other crap makes me dislike them more, and even try to convince others to boycott this POS company..

Thu, 06/05/2014 - 10:14 | 4826668 asking4it2k
asking4it2k's picture

Funny how GM and the media are not reporting the fact that the faulty parts were outsourced to Mexico in order to "cut costs"

In the end "cutting costs" ended up costing GM MORE !!


CEOs are you taking notes ??


Thu, 06/05/2014 - 09:29 | 4826470 Cognitive Dissonance
Cognitive Dissonance's picture

This is GM's version of the 'rouge' trader.

Not surprisingly those in charge, the senior execs, are clueless and clean handed, now ready for their year end bonuses to be upgraded, no longer dangerously optional but simply standard equipment.

Thu, 06/05/2014 - 09:30 | 4826484 jcaz
jcaz's picture

Yep, if I was a GM engineer, I'd be walking out the door today-  upper management is clean due to ignorance?   Guess it worked for the banks......

Thu, 06/05/2014 - 09:39 | 4826529 Captain Willard
Captain Willard's picture

This is just epic. The "Safety" Department reported to Mary Barra for 3 years but of course she never knew about it. The usual suspects -lower echelon managers - have been rounded up and shot.

This episode defines modern American business and government: No one is responsible for anything. 

Thu, 06/05/2014 - 09:48 | 4826567 Citxmech
Citxmech's picture

Yup.  No one's responsible for anything other than "incompetence" - which, of course, is just an unfortunate natural condition.  I mean, who could've possibly known?  

Amazing how rampant incompetence seems to be these days.  

(Odd how the incompetent's actions always seem to benefit the company's' bottom line though.  When I fuck up, usually it costs me.)  

Thu, 06/05/2014 - 11:17 | 4826855 CheapBastard
CheapBastard's picture

Luckily there's plenty of work out there to be done, from Flipping Houses and becoming a millionaire all the way to getting one of those 'shovel-ready jobs' they talk about. CNBC, CNN and so on brag every day how 'robust' this economic recovery is.


Got to look at the silver lining ... and watch more TV.

Thu, 06/05/2014 - 09:27 | 4826473 g'kar
g'kar's picture

Toyota gets hammered and GM gets a slap on the wrist.

Thu, 06/05/2014 - 09:30 | 4826487 Cognitive Dissonance
Cognitive Dissonance's picture

American fascism. Love it or be leveled by it.

Thu, 06/05/2014 - 09:45 | 4826548 Ignatius
Ignatius's picture

American Cheka.

Thu, 06/05/2014 - 09:28 | 4826480 NoDebt
NoDebt's picture

Just a few low-level rogue employees.  Thank God it's not an organization-wide systemic problem or worse, a cover-up of such a situation.  Now we can all go home and leave poor beleaguered GM alone.

Thu, 06/05/2014 - 09:34 | 4826502 Big Corked Boots
Big Corked Boots's picture

Well, it's not like GM had a track record of producing inferior shitboxes... Oh, wait -

Thu, 06/05/2014 - 09:30 | 4826490 rtalcott
rtalcott's picture

NOT 'effing possible...absolutely not...nfw there was not executive intervention...

Thu, 06/05/2014 - 09:31 | 4826491 Seasmoke
Seasmoke's picture


Thu, 06/05/2014 - 09:38 | 4826522 NoDebt
NoDebt's picture

I see what you did there.

Thu, 06/05/2014 - 09:34 | 4826500 Seasmoke
Seasmoke's picture

Amazing no scandal, ever reaches the top. So why pay a CEO ??

Thu, 06/05/2014 - 09:35 | 4826505 Ljoot
Ljoot's picture

At a GM dealer near you, the Chevy Kevorkian!


Thu, 06/05/2014 - 09:37 | 4826513 Space Animatoltipap
Space Animatoltipap's picture

A horse is the original car. Before 150 years or so cars did not exist. Now there are more than one billion of these things on the planet. And boy, everyone has become very happy because of these iron/plastic devices ... 

Thu, 06/05/2014 - 09:39 | 4826531 NoDebt
NoDebt's picture

Well, yeah, I'm sorta partial to them myself.

Thu, 06/05/2014 - 09:39 | 4826530 csmith
csmith's picture

Gentlemen, start your coffins!

Thu, 06/05/2014 - 10:11 | 4826655 what's that smell
what's that smell's picture

another bitter pill for the battered muppets to swallow.

smells like business as usual to me (check in the mail, not in your mouth, crack down on wall street, etc)

Thu, 06/05/2014 - 09:40 | 4826533 Last of the Mid...
Last of the Middle Class's picture

So let me get this right. As CEO of GM you're running a company that is too big to fail and you cannot be held accountable because you knew nothing and all your underlings fucked up and you're making millions of dollars. Who says crony capitalism doesn't work. Just get those pesky little surfs to buy those little death traps and keep quiet.

Thu, 06/05/2014 - 10:56 | 4826801 Never One Roach
Never One Roach's picture

Looks like you've caught on.

Thu, 06/05/2014 - 09:46 | 4826554 GrinandBearit
GrinandBearit's picture

All distractionary bullshit.



Thu, 06/05/2014 - 09:52 | 4826597 All is chosen
All is chosen's picture

Was: Planned Obsolescence 

Now: Planned Convalescence 

Vance Packard where are you?!

Thu, 06/05/2014 - 09:55 | 4826612 Duc888
Duc888's picture



I worked for Electric Boat for a time as a designer right next to very well seasoned engineers.  These (imho) were by and large brilliant people.  Never once did I see any of them engineer a part and say "naaaaa, that's good enough".  It's been my experience that any attempt to "cheapen" a part comes much much higher up in the command structure.  Almost weekly I witnessed Engineers go nose to nose in some heated debate over which part was "better" as they were on their own design teams...but again, never once did I see one of them argue FOR an inferior product.

Those decisions come from above their pay grade.

Thu, 06/05/2014 - 10:02 | 4826629 swmnguy
swmnguy's picture

It's a really bad thing when incompetence, overly complex and inept hierarchy, and Kafka-esque policies are allowed to be used as excuses for killing people for profit.

Thu, 06/05/2014 - 10:12 | 4826659 asking4it2k
asking4it2k's picture

So is GM going to stop outsourcing production to Mexico?

If not, then expect more faulty parts and more recalls.

Thu, 06/05/2014 - 10:24 | 4826703 TalkToLind
TalkToLind's picture

But you can have a new GM car for $129.99 per month!

Thu, 06/05/2014 - 10:25 | 4826705 29.5 hours
29.5 hours's picture



Ok, thank goodness no senior level executive was involved -- just a bunch of incompetent engineers with decades of experience. I wonder who hired and kept on so many incompetent engineers? We can assume this will remain a mystery...





Thu, 06/05/2014 - 10:25 | 4826706 djsmps
djsmps's picture

" Kenneth Feinberg will administer a compensation program". What a joke. Feinberg will go on 60 Minutes and state that all claims were fraudulent.

Thu, 06/05/2014 - 10:56 | 4826800 Calculus99
Calculus99's picture

Many of the GM senior personal are starting to remind me of Manuel from Fawlty Towers -

"I know nothing....."

Thu, 06/05/2014 - 10:56 | 4826802 pupdog1
pupdog1's picture

This GM scam is utter bullshit.

This particular ignition cylinder problem is unique because of its simplicity and obviousness. Most big failures are highly complex, multidisciplinary, and involve unique chains of events. This one is second-year engineering school stuff.

The lowest level engineer at GM would have grasped all of the the catastrophic failure consequences of this in a minute or two.

Engineers in the American car companies have no say whatsoever in anything that starts with a dollar sign. This went straight to seniormost non-engineering management because of the massively expensive recall consequences.

And the top corporate lawyer was cleared. Now there's a fucking suprise.

Thu, 06/05/2014 - 21:57 | 4828655 Seeing Red
Seeing Red's picture

The bean-counters in many corporations seem to have some magical control over engineering and manufacturing.  It's as if there are policy meetings ... but you, or anyone YOU know, are ever invited ....

p.s.  Thank god marketing and sales are always transparent.

Thu, 06/05/2014 - 10:58 | 4826809 Mark it Zero
Mark it Zero's picture

Why did Jeff Skilling go to prison?  He didn't kill anybody.

Thu, 06/05/2014 - 11:29 | 4826902 swmnguy
swmnguy's picture

Same reason as Bernie Madoff, and here in Minnesota, Tom Petters and Denny Hecker.  Because they committed the ultimate crime in our current society.  Their actions caused people to lose faith in the system.  That's the worst crime you can commit, and is penalized accordingly.

Thu, 06/05/2014 - 11:58 | 4827001 I Write Code
I Write Code's picture

Now they can bring in some saviors from Solyndra or healthcare.gov.

Thu, 06/05/2014 - 11:59 | 4827010 Fix-ItSilly
Fix-ItSilly's picture

lol!  The same drawing # was used for 2 different parts.  This confirms a conspiracy existed, internal to the company and recognizable, if not participated by, the supplier.

This is quite a poor cover-up.  I wonder if the victims will lift the cover.  Obviously the NTSB won't.

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