THE GM RECALL

GM to release results of internal probe on Thursday

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DETROIT -- General Motors plans to release on Thursday morning results from its internal investigation into why it did not recall 2.6 million vehicles with faulty ignition switches for about a decade after problems surfaced.

GM said CEO Mary Barra plans to lead a 9 a.m. ET town hall-type meeting with employees at the automaker’s technical center north of Detroit, followed by a press conference with reporters. GM described the events as an “update” on the ignition switch recall, but Barra is expected to share findings from an investigation conducted by former U.S. Attorney Anton Valukas.

GM sales managers sent messages Wednesday to dealers encouraging them to watch a webcast of the events.

Barra has promised that the report will provide an “unvarnished” examination of what went wrong inside GM, which last month admitted that it broke federal law and agreed to pay a record $35 million fine levied by auto-safety regulators. She said Valukas’ report would be completed by early June. GM is required to turn it over to regulators by June 30.

It’s unclear how much, if any, of the report GM plans to release immediately. Barra also is scheduled to update analysts on the recall during a conference call Thursday afternoon.

Since mid-February, GM has recalled 2.6 million cars, including the Chevrolet Cobalt and Saturn Ion, because their ignition switch may not meet the company’s torque specifications. That flaw can cause the key to rotate out of “run” mode while the car is moving, disabling airbags, power steering and power brake assist.

GM says it has linked the problem to 13 deaths and 47 crashes.

Update on victims' fund

The company is expected to provide an update Thursday on prospective victim-compensation plans being devised by attorney Kenneth Feinberg. But it's unlikely that a formal proposal will be released. Feinberg told several media outlets that he needs a few more weeks to finalize his work.

An outline of Feinberg's proposal will be presented to GM and victims' attorneys in coming weeks, with a final version expected to be completed sometime in June, a person familiar with the plan said.

Valukas' investigation was co-led by Michael Millikin, GM's chief counsel. During congressional hearings on the ignition switch in April, several lawmakers questioned how GM's top lawyers wouldn't have known about the problem amid lawsuits and settlements with victims' families.

GM has made few personnel moves since announcing the recall, saying it wanted Valukas' review to play out. In April it suspended two engineers with pay for their roles in handling of the switch: Ray DeGiorgio, who documents show quietly approved a change to a more robust switch in 2006, without a corresponding part number change; and Gary Altman, the program engineering manager for the Cobalt who records show decided to close an inquiry into the switch problem in 2005 without changing anything.

More changes expected

GM is likely to identify more changes to its safety approach as a result of the report's findings. When Barra announced its internal probe in March, she promised that GM would take a series of steps to improve its safety record and prevent future defects from slipping through.

Already, GM has restructured its engineering organization so it can more easily flag potential safety defects. A "product integrity" division includes a team of top GM engineers to review vehicles for safety compliance at regular intervals of development, similar to an approach that GM has used for years to improve ride, handling and other performance characteristics.

GM has tripled its team of safety investigators, to around 60, to accelerate the review of long-known problems on older cars while also giving closer inspection to vehicles rolling off the assembly line.

Wave of recalls

Beefing up the investigative team has in part led to the wave of safety recalls announced by GM in recent months. Through May, the company initiated 30 recalls covering 13.8 million U.S. vehicles, ranging from the ignition switch problem to potential defects on 2015 pickups and SUVs that had just reached dealer lots.

Longtime GM engineer Jeff Boyer in March was appointed as GM's first global safety chief. And GM global product chief Mark Reuss now leads a team of five, including Boyer, which makes the ultimate decision on recalls. Previously, the heads of manufacturing, engineering and quality decided when to issue recalls, sources have said.

GM also has started a new program that encourages employees to speak up if they encounter a potential safety problem.

You can reach Nick Bunkley at nbunkley@crain.com. -- Follow Nick on Twitter

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