Report exposes GM’s culture of complacency: Part I

Sakkas Cahn & Weiss

Most Americans were shocked earlier this year when news first broke about the General Motors recall scandal. American automobiles have been a symbol of pride for the United States, and these companies have traditionally been associated with quality and reliability. This was, in part, why many Americans felt comfortable with the decision to bail out GM and other automakers during the recession.

Since the story first broke, we have all learned the sordid details of how such automotive defects could occur and how recalls could be delayed or missed altogether. The problem is not a temporary lapse in quality control, but rather serious issues with the way that GM seems to operate as a company.

A recent article in Bloomberg reveals that mid-level and high-level GM employees who tried to call attention to safety problems were ignored and even punished for speaking up. The details of a “culture of complacency” are laid out in a 325-page report summarizing findings from 41 million documents and 230 witness interviews. The “Valukas Report,” as it is called, was independently written but commissioned by General Motors.

One shocking detail that Americans learned several months ago is that the problems with faulty ignition switches in the Chevrolet Cobalt and other vehicles are not new. In fact, GM officials likely knew about these dangerous and deadly defects since the early 2000s.

At the very latest, GM should have issued a recall when the faulty ignition switch caused the first fatal accident in 2005. In that crash, a 16-year-old girl from Maryland crashed her 2005 Cobalt into a tree and the airbags failed to deploy. Instead, the recall was not issued until nine years and a dozen deaths later.

The Valukas Report discusses GM’s attempts to ignore and silence whistleblowers who tried to call attention to safety problems. Please check back later this week as we continue our discussion.

Source: Bloomberg Businessweek, “GM Recalls: How General Motors Silenced a Whistle-Blower,” Tim Higgins and Nick Summers, June 18, 2014

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