Report fingers GM culture as a culprit

The report highlights the automaker's pass-the-buck mentality.
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DETROIT -- General Motors' hidebound culture is the subject of numerous books and business school case studies. The 325-page report penned by attorney Anton Valukas' investigative team might be among the most revealing.

Flowing through the chronology of names, dates, meetings and reports detailing GM's mishandling of a deadly ignition-switch defect are examples of a corporate culture that stymied efforts to find and fix the problem.

The report even spends 10 pages discussing how the quirks of GM's culture may have shaped its response to the faulty switch. Relying in part on interviews of 230 employees, the report describes a troubling mixed message subtly conveyed by senior leadership: that safety is paramount, yet so is keeping a lid on costs.

"Repeated throughout the interview process we heard from GM personnel two somewhat different directives," the report reads. "'When safety is an issue, cost is irrelevant' and 'cost is everything.'"

The report provides a harsh rebuke of GM's infamous committee culture, too, one that on the ignition-switch issue rendered "determining the identity of an actual decision-maker ... impenetrable."

The report highlights the pass-the-buck mentality in a section that details three high-level managers who were successively assigned over an 18-month span, starting in mid-2012, as "champions" to get to the bottom of the issue.

"They did not elevate the issue to their superiors," the report says. "The common thread was to hold more meetings and refer the matter to additional groups or committees."

Some GM employees told investigators that they didn't take any notes during "critical safety meetings" because they didn't think lawyers wanted them to.

Investigators never found evidence of an edict banning note-taking. But "the no-notes direction ... reached the status of an urban myth that was followed, an instruction passed from GM employee to GM employee over the years," the report reads.

One of the most colorful descriptions of the cultural morass came from CEO Mary Barra herself. She described for investigators a phenomenon known as the "GM nod."

"The GM nod, Barra described, is when everyone nods in agreement to a proposed plan of action, but then leaves the room with no intention of follow-through," the report reads. "It is an idiomatic recognition of a culture that does not move issues forward quickly, as the story of the Cobalt demonstrates."

There was also the "GM salute," described by another interviewee as "a crossing of the arms and pointing outward toward others, indicating that the responsibility belongs to someone else, not me."

In a section of the report titled: "2006 to 2010: Failure to Take Basic Steps," the report recounts how two outsiders -- a Wisconsin state trooper and an Indiana University research team -- in 2007 connected the link between ignition switches shutting off and the nondeployment of airbags. It would take GM another six years to fully understand the connection, even though the trooper's report had been sitting in GM's own files the entire time.

The findings "show utter incompetence that is bred by people working in silos and not having the accountability to fix problems," says Maryann Keller, an auto industry consultant.

Ultimately, Valukas' report says it uncovered no evidence of any employee making "an explicit trade-off between safety and cost" related to the ignition switch. It notes that, because engineers early on failed to grasp a link between the ignition switch slipping out of the "run" position and airbags not deploying, the problem was treated as a customer-satisfaction issue, not a safety problem.

Still, "we cannot conclude," the report reads, "that the atmosphere of cost-cutting had no impact on the failure of GM to resolve these issues earlier."

You can reach Mike Colias at mcolias@crain.com.

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