THE GM RECALL

GM's current product chief was part of '05 ignition-flaw debate

In 2012, Doug Parks was named to a newly created position to oversee managers who are now called executive chief engineers.
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DETROIT (Bloomberg) -- A top product-development executive still working at General Motors Co. was involved in deliberations about a deadly ignition flaw kept from the public, newly released documents indicate.

Doug Parks, then a vehicle chief engineer for the Chevrolet Cobalt in 2005, was involved in the debate over whether it was worth the cost to redesign a faulty ignition switch that had been installed on millions of cars, according to company e-mails and documents released Thursday by congressional investigators. He would later become vice president of global product programs under Mary Barra, now GM’s CEO. 

Barra, who rose from product development to become CEO in January, has tried to manage the fallout over the delayed switch recall by assuring lawmakers that GM’s corporate culture regarding safety has changed. While GM has ousted 15 people over the switch defect and two other senior engineers involved retired, Parks remains.

“As Ms. Barra has said repeatedly we have taken all of the personnel actions that we feel are appropriate at this time,” GM spokesman Greg Martin said in an e-mail.

He said GM stands behind the internal investigation report completed this month that found Barra and other executives were unaware of the defect or deliberations over whether to fix it. At least 13 deaths in crashes have been blamed on the switches, which can be inadvertently shut off when jarred, cutting power to the engine and deactivating air bags.

GM has recalled about 20 million cars in North America for various fixes this year, including 9 million related to ignitions.

‘Quick Solution’

Congressional investigators are looking into why the automaker delayed fixing the switch for years and whether some engineers tried to hide the fix from executives and the public.

Deliberations about the flaw were occurring as far back as 2005. Parks said in a May 2005 e-mail that changing the key design “appears to be the only real, quick solution,” according to the documents released Thursday.

Parks was invited to a June 14, 2005, meeting that included slides on a New York Times article describing how the Cobalt’s engine could cut out. He was listed as being invited to a March 1, 2005, meeting whose subject was “vehicle can be keyed off with knee while driving.” It’s not clear if he attended either meeting.

Parks would go on to become a cornerstone of Barra’s reorganization of product development in July 2012 when she eliminated layers of management. Under Barra, product programs were consolidated under single executives rather than spread among three people, shaving 20 positions globally.

‘Devastating Picture’

Barra named Parks to a newly created position to oversee those managers now called executive chief engineers. He’d previously been executive director and group vehicle line executive for electric cars.

GM declined to make Parks available to comment.

In addition to the role GM engineers and executives played, lawmakers are also looking into whether the U.S. National Highway Traffic Safety Administration did enough to act on evidence it had of a potential safety defect.

“The documents that we have received to date paint a disturbing and devastating picture, a beyond worst-case systemic breakdown that led to lives needlessly lost,” U.S. Reps. Fred Upton, R-Mich., and Tim Murphy, R-Pa., said in a statement Thursday. “But as the recalls mount important questions remain and our investigation continues into both GM and NHTSA.”

U.S. Rep. Bill Johnson, R-Ohio, referred to Parks’s suggested quick solution during a June 18 hearing featuring Barra and Anton Valukas, the former U.S. prosecutor who led GM’s internal investigation.

DeGiorgio change

“This solution was not implemented for months,” Johnson said, asking Valukas why he thought that was the case.

“Part of the dysfunction of what was happening in the organization,” Valukas said. “They were treating this as a customer convenience issue rather than a safety issue. So they look at issues in terms of price, expense, cost.”

The documents released by the House committee also show that a GM engineer at the center of the investigations began working with suppliers on a part redesign in 2006 months after an internal committee killed a proposal for a new switch.

Ray DeGiorgio worked with Delphi Automotive and its suppliers to get prototypes with more-robust designs that wouldn’t allow the ignition to slip out of “run” as easily, according to documents released Thursday by the House Energy and Commerce Committee.

Cost concern

DeGiorgio is among the employees GM let go this year.

He led the team that designed the faulty switch, according to legal, congressional and internal company documents released previously. In April 2006, after car columnists and customers complained about the switch, DeGiorgio authorized Delphi to make a change that dramatically improved its performance in the field, according to the documents.

DeGiorgio also authorized the part number to remain the same, a decision that prevented some people from knowing the part had changed. That move ran counter to GM policy and confounded company investigators for years afterward, according to an internal company investigation.

In a Sept. 28, 2005, e-mail with the subject line “No new Delta/Kappa ign switch for MY 2008,” an engineering manager explained to a group that included Lori Queen, an executive on GM’s small car program at the time, that the decision had been made not to change the ignition switch for model year 2008. The costs of a new switch, at 90 cents per part, would require $400,000 in tooling to add volume of 500,000 units, the engineering manager, John Hendler, said.

Grand jury

A team tried to offset those costs and was unable do so, he said in the memo.

“Consequently, the ignition switch for the Deltas and Kappas will remain the carryover single detent switch until the piece cost hit can be eliminated or significantly reduced,” Hendler said.

This e-mail was previously disclosed in the House committee’s investigation.

Some of the documents, including ones involving DeGiorgio, released by the House panel Thursday were marked as “confidential” and as provided “to the U.S. Department of Justice in response to a grand-jury subpoena.”

“We have openly acknowledged that the Southern District of New York is looking into activities at General Motors,” Martin, the GM spokesman, said. “A grand jury and subpoenas are part of that process. As we have said before, we are fully cooperating and will continue to do so.”

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