GM's Scathing Internal Inquiry Is A Tale Of Bureaucratic Incompetence

In announcing the findings of an internal investigation about the ignition switch defect that affected 2.6 million cars, General Motors CEO Mary Barra said the company did not conspire to cover up the problem. Instead, the investigation reveals an organization mired in bureaucracy and unable to take responsibility for its mistakes.

That's the thrust of former U.S. Attorney Anton R. Valukas' inquiry, which was commissioned by GM and delivered to federal regulators and Congress today. In his exhaustive 325-page report, Valukas doesn't pull punches about GM's corporate culture from the late 1990s through the time the recall was finally issued earlier this year, and how it contributed to the proliferation of a defective part tied to 13 deaths and managed to avoid detection for so long.

At long last, GM has taken responsibility for this problem. It's recalled more than 13 million older and newer cars, "removed" 15 employees from their positions, and have said they will establish a victims' compensation fund. And Barra did not mince words today when addressing her employees about how severe this problem was.

That's good, because Valukas' findings do not paint a pretty picture. Here are some key findings.

It singles out the engineers. Specifically, Ray DeGiorgio, the now-suspended engineer who approved for production the defective ignition switch that went into the Cobalt, Ion, G5 and other cars. The report says there is no question DeGiorgio knew the switch was below GM's own specification when he approved it.

In 2006, DeGiorgio also signed off on the change that swapped the defective ignition switch with another part, but didn't change its part number, something the report said helped keep the issue unnoticed for years. These actions "misled" GM investigators, the report said.

DeGiorgio was said to be very upset during questioning by congressional officials where he said he did not remember making that change. But he gets repeatedly singled out in Valukas' report.

GM employees missed the point of the problem. "Those individuals tasked with fixing the problem — sophisticated engineers with a responsibility to provide customers with safe and reliable automobiles — did not understand one of the most fundamental consequences of the switch failing and the car stalling: the airbags would not deploy."

Those customers were not provided with airbag protection when they needed it most, the report said.

While GM at first deliberately designed the airbags not to work when the car was switched off, to prevent passengers from being injured by airbags in parked cars, they failed to understand that this meant the airbags didn't work during a mid-drive shutdown.

"A critical failure in GM's personnel delay in fixing the problem was their failure to understand, quite simply, how the car was built," the report said. But wasn't it their car?

They didn't see it as a "safety" issue. GM saw the problem of stall-outs as a "customer convenience" issue, "something annoying but not particularly problematic," which meant it got far less attention within the organization.

Engineers didn't compare the old and new ignition switches. After DeGiorgio approved a new switch for Cobalts and other cars starting in 2007, investigators struggled to find why the later cars didn't have the stall-out problem. They also never compared the new and old switches. "The investigating engineers failed to certain basic investigative steps," the report said. It took an outside expert working for a plaintiff's attorney in a lawsuit to do that.

The GM bureaucracy repeatedly failed. GM has long been known for a bureaucracy that rivals the federal government's, but here it cost the company and its customers dearly. Valukas writes that "group after group and committee after committee" studied the problem over 11 years, but never got it fixed and failed to link the ignition switch issue to airbag failures.

"Although everyone had responsibility to fix the problem, nobody took responsibility," it said.

"The GM nod." "It was an example of what one top executive described as 'the GM nod,' when everyone nods in agreement to a proposed plan of action, but then leaves the room and does nothing." Ouch.

There was no "sense of urgency" to fix the problem. "While the issue of the ignition switch passed through numerous hands at GM, from engineers to lawyers, nobody raised the problem to the highest levels of the company." This explains why Barra, her predecessor Dan Akerson, and other officials were apparently unaware of the issue.

GM's Scathing Internal Inquiry Is A Tale Of Bureaucratic Incompetence

DeGiorgio called the part "the switch from hell." The switch was developed in the late 1990s for the Delta and Kappa platform cars. It always had known problems, failing to perform to design specification; it performed so poorly on the Saturn Ion that the car's entire electrical system had to be redesigned.

In an email to supplier Delphi, DeGiorgio said he was "tired of the switch from hell."

The switch had other problems as well. In the Ion, it was known for failing to start on cold days. This "was a personal embarrassment to DeGiorgio."

No one but DeGiorgio knew the ignition switch wasn't to spec. Based on "hundreds of interviews," apparently it wasn't known that the ignition switch wasn't up to specifications until about 2013. But other people raised the issue over several years, although it was never fixed.

Another quality manager noticed issues. Program quality manager Joseph Taylor and several of his employees experienced three ignition switch shutdowns, but he did not report them because he didn't consider them significant.

It happened to an auto journalist on a press drive. At the 2004 launch of the Cobalt, an unnamed journalist experienced a shutdown after hitting the key fob with his knee. He reported it to the Cobalt's chief engineer, who asked another manager to look into it. They decided it was not a safety issue.

It's not clear who this journalist was, or whether their story included a mention of this problem.

Investigations from outside GM determined the problem. The report says independent research by both Indiana University and a Wisconsin state trooper who was looking into a 2006 crash that killed two teens. They determined ignition switch of the involved Cobalt was in the "accessory" position before the crash, shutting off the car and disabling its airbags. The documents were filed with GM and were publicly available, but no one at the automaker read them until 2013.

Barra and Mark Reuss didn't learn of the problem until recently. The report says CEO Barra and product chief Reuss didn't learn about the defect or the delay in addressing it until Jan. 31 of this year. Barra was briefed that data was being reviewed for a possible recall in December.

In the end, Valukas recommended a greater emphasis on safety and individual accountability, a better defect investigation process, more awareness of what other groups within the company are doing, an increased role for the legal department when it comes to customer claims, and better communication with federal safety regulators, among other suggestions. Let's hope all that happens – and more.