GM employees are 'owning' Valukas report, Barra says

Barra: "I feel tremendous engagement by the employees that they're going to do the right thing. They're raising issues, they're asking questions."
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DETROIT -- General Motors CEO Mary Barra said today that the company's employees are galvanized by the findings of its internal investigation into a deadly defect that exposed "incompetence" and a troubled corporate culture.

"They are absolutely owning the report," Barra said of the 325-page report released last week by outside attorney Anton Valukas on a GM ignition switch defect in 2.6 million small cars, which GM has linked to 13 deaths. His investigation found no corporate cover-up but blamed incompetence and a plodding GM culture for letting the problem fester for more than a decade.

The investigation cleared Barra and her top executives of wrongdoing but led to the ouster of 15 employees. Of those, 11 names have been reported by news organizations. Barra said no more dismissals are anticipated.

“We feel we’ve taken the appropriate actions as it relates to the ignition switch recall,” Barra said, before her first address to shareholders as CEO.

Barra told reporters at GM's headquarters here, ahead of her first annual shareholders meeting as CEO, that the employees she has heard from since the report's release are resolved to improve the company.

"They know what this company can be," Barra said. "I feel tremendous engagement by the employees that they're going to do the right thing. They're raising issues, they're asking questions."

Barra reiterated that she wants to use the findings from the Valukas probe to drive change within GM, which was faulted in the report for a culture of "silos" that lacks individual accountability.

"It's about using the learnings and the failings to make sure that we improve the whole development process and the culture," she said.

Barra said last week that GM will enact a series of changes to improve safety, such as improving communication between engineering, legal and other departments to better track patterns of potential defects.

GM Chairman Tim Solso, who presided over his first annual meeting since being appointed non-executive chairman in January, said the board "could not be prouder" of Barra's handling of the recall crisis.

UAW on board

Shareholders voted to add retired UAW Vice President Joe Ashton to the GM board. Ashton, 65, who served as the union's chief GM negotiator since 2010, becomes the first UAW member to be on GM's board and the company's 12th director.

Ashton was nominated by the UAW Retiree Medical Benefits Trust, which owns about 140 million GM shares.

No shareholder mentioned the ignition-switch recall during the meeting, which lasted about 20 minutes.

Family members of victims who died in crashes linked to the ignition switch protested outside GM's headquarters Monday and this morning.

GM shares have fallen 11 percent this year, to $36.50 at Monday's close, amid the hit to its reputation over the ignition switch issue and a wave of subsequent recalls as the company redoubles its safety focus. GM shares fell 10 cents today, closing at $36.40.

Protesters gathered in front of GM headquarters in Detroit this morning.

Photo credit: TOM WOROBEC

Multiple recalls

So far, GM has issued 34 recalls covering 13.9 million vehicles, although some of those were counted more than once because they are being called back for multiple fixes. GM has set aside $1.7 billion to cover recall-related expenses this year.

Barra said that 70 percent of those vehicles are models that are no longer in production.

GM still faces investigations into its handling of the ignition switch by two congressional committees and the Department of Justice.

This month, lawyer Kenneth Feinberg is expected to lay out a plan to compensate the families of victims who died and those who were seriously injured in accidents linked to the switch.

Barra said today that Feinberg will be given “complete independence” over the victim-compensation process. She said Feinberg likely will finalize by the end of June his criteria for determining which victims qualify for compensation, and said GM should have a better idea of the cost of the program by then.

Last week, GM executives acknowledged that the number of deaths related to the defect could rise from 13 depending on the criteria that Feinberg outlines.

Bloomberg contributed to this report.

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

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