Consequences

For the Company

General Motors agreed to pay a $35 million fine for failing to notify the NHTSA about the ignition switch defect in a timely manner.

As part of the Consent order with NHTSA and in response to the Valukas Report, CEO Mary Barras has committed to or has already:

  • Hired Jeff Boyer for the new position of Vice President, Global Vehicle Safety
  • Changed norms to emphasis safety (e.g., the Speak up for Safety program)
  • Promote GM’s non-retaliation policy
  • Involve suppliers in product safety
  • Stress individual accountability for safety and ensure employees are aware of their responsibilities regarding vehicle safety
  • Promote communication between and within teams and departments
  • Improve communications with NHTSA (the Consent order required monthly meetings with GM for a year)
  • Take steps to involve GM lawyers in the safety process
  • Upgrade data storage, retrieval, and analysis
  • Overhaul the product investigation process (thus far, they have hired 35 new investigators)
  • As part of the Consent order, reduce the decision-making time for recalls
  • Provide more – and more effective – training on policies, especially those related to safety
  • Refine the documentation process

General Motors has earmarked $550 million (and counting) for the compensation fund.

Additionally, GM has paid an intangible value in the form of brand reputation.

 For Employees

Fifteen employees were fired, including vice president for global regulatory affairs Michael J. Robinson, attorney William Kemp have engineers Ray DeGiorgio and Gary Altman, and safety officers Gay Kent and Carmen Benavides. Five unidentified employees were censured.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s