General Motors has told 15 employees to clear out their desks, as the fallout over the ‘Switchgate’ ignition switch scandal continues.
GM CEO Mary Barra announced the terminations this week, adding that five other employees would be disciplined. Barra blamed the controversial failure on “incompetence and neglect”.
To date, GM ignition switch failures have been linked to 13 deaths and at least 54 collisions, but as lawyers investigate further, that figure could rise.
GM has established a compensation fund in preparation for the claims, with early estimates suggesting the fund could be as large as US$1.5 billion.
Questions remain over the compensation process, however, with GM yet to acknowledge if it will uphold its right under US law for ‘protection’ from such claims during the carmaker’s bankruptcy period in 2009.
The dismissals follow an internal report by GM over Switchgate, with Ms Barra saying the report found “a pattern of incompetence and neglect” but no conspiracy from senior management to cover it up.
The 15 employees now without jobs represent a mix of executives from engineering, quality control, legal and public policy departments, while at least one was a vice-president.
“We failed these customers,” Ms Barra said during her address. “We didn’t do our job. We are going to fix the failures in our system; that I promise.”
Ms Barra said around 113,000 of the 2.6 million affected vehicles have been repaired so far, with GM working feverishly to produce and deliver the replacement ignition parts.
The global carmaker says vehicles that have yet to be serviced by the recall can still be driven, providing the driver has no additional weight on the ignition key (key rings, for example).
Faulty ignition switches are believed to have been ‘bumped’ to the ‘Off’ position during collisions and during general driving, causing power steering, power-assisted braking and most importantly - airbags - to be disabled when they were needed most.
GM has already accepted a record US$35 million fine handed down by America’s National Highway Traffic Safety Administration (NHTSA), while future criminal proceedings from the US Department of Justice have not been ruled out.
No word yet on whether vehicles in Australia will be recalled, although Ms Barra announced further recalls are likely during the US summer.
A new vice-president in charge of safety has been appointed by GM, with the carmaker recalling a record 15.8 million vehicles during 30 campaigns so far this year; 20 times the number of vehicles recalled by GM throughout all of 2013.
The 300-page report contains 90 recommendations for GM. Stay tuned to TMR for more as the fallout continues.
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