Business
10:40 am
Thu June 5, 2014

GM CEO Announces Firings In Wake Of Report On Recall Failings

Transcript

STEVE INSKEEP, HOST:

Let's get the latest news about General Motors. GM has now dismissed 15 employees for misconduct. This is misconduct in the company's response to faulty ignition switches in millions of GM vehicles. Those switches have been linked to at least 13 deaths. The CEO, Mary Barra, announced the actions today in coordination with an internal investigation led by a former U.S. attorney. Here's what Mary Barra had to say.

(SOUNDBITE OF ARCHIVED RECORDING)

MARY BARRA: I never want to put this behind us. I want to keep this painful experience permanently in our collective memory. I don't want to forget what happened because I, and I know you, never want this to happen again.

INSKEEP: That's what she said as this report was released. And Mary Barra also said GM will create a compensation fund for crash victims and their families. Let's talk a little more about this with NPR's Sonari Glinton, who's been following today's events in Detroit. Hi, Sonari.

SONARI GLINTON, BYLINE: Hey, Steve. How's it going?

INSKEEP: So we should remind people, it took years and years for GM to admit this problem. What's the report say about why it took so long?

GLINTON: Essentially, the report says that there wasn't a conspiracy, that it was just a culture of incompetence and misconduct, where people who were supposed to report sort of didn't - and also that there were some structural problems within the company that kept recalls and the decisions from going to the highest levels.

INSKEEP: I'm not sure I quite understand. Structural problems in the company? Meaning there wasn't a mechanism for people to report problems up the chain of command?

GLINTON: Yeah, that it didn't go to, say, the CEO's office so that, you know - that a CEO could make that decision. And now the company says that, you know, the big decisions about these recalls are going to involve top management. And that hasn't always happened.

INSKEEP: OK, so you said 15 people have been fired. Where are they on the hierarchy?

GLINTON: Well, they were mainly executives. Over half of them were in the executive ranks. And so there is a sense that, you know, some of these decisions were high up. They weren't at the highest levels, but they were pretty high up.

INSKEEP: Where does Mary Barra fit in all of this?

GLINTON: Well, you know, she was the head of products. And for three years the safety reported into her office. But the report clears Mary Barra and past CEOs of having direct knowledge of this recall and the delays in the recall situation.

INSKEEP: Didn't have direct knowledge - why? - because of where they were in the company at the time or because of these structural problems that you mentioned?

GLINTON: Because of where they were in the company and because of just a structural problem that kept any sort of information of this degree out of their offices.

INSKEEP: So they're describing human error that can't quite be pinned on any one human. It's the way the company was structured, but then GM is getting rid of a number of people. And we mentioned that they are also taking steps to compensate crash victims. How will that work?

GLINTON: Well, it's a voluntary program. And people who lost a loved one or were injured can apply. Kenneth Feinberg, who's been in charge of some other big compensation packages, will sort of determine the details of that package. We don't know how much it's going to cost yet, until Mr. Feinberg sort of decides or works it out with the victims.

INSKEEP: You said a voluntary program. Does that mean that people would agree - rather than suing for larger amounts of money, they would voluntary take what GM offers?

GLINTON: Yes, but GM didn't indicate whether or not it sort of waved its liability that it got clemency from because of the bankruptcy 5 years ago this week exactly. So, you know, there's an understanding that the people - there's no indication of what will happen to the people who are outside of this group who decide to voluntarily go in and sue the company individually.

INSKEEP: Very briefly, Sonari Glinton, how is all this affecting GM sales?

GLINTON: So far, not very much. As a matter of fact, last month in May, GM sales went up 13 percent. I mean, it remains to be seen how long this lingers in the minds of shoppers. But so far shoppers are still buying GMs.

INSKEEP: NPR's Sonari Glinton. Thanks very much.

GLINTON: Thank you, Steve. Transcript provided by NPR, Copyright NPR.

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