General Motors suspended two engineers with pay for their part in the company’s long failure to recall Chevrolet Cobalts and other small cars equipped with a defective ignition switch linked to 13 deaths, the automaker said Thursday.
The company also said it is expanding the reach of its ignition-switch repair to include the replacement of lock cylinders for the 2.6 million vehicles being recalled, adding to the substantial financial toll resulting from the defect.
GM said faulty lock cylinders can permit the vehicle to keep running after the ignition key has been removed, raising the risk of roll-aways and crashes. The company said it knows of several hundred complaints of keys coming out of ignitions; in one case, the problem resulted in a crash and an injury claim. The company said it knows of no fatalities linked to the problem.
GM also announced that it would take a charge of approximately $1.3 billion in the first quarter, primarily for the cost of recall-related repairs and related courtesy transportation. Despite the huge financial hit, the company said it expects “to report solid core operating performance in the first quarter financial results.”
GM chief executive Mary T. Barra said the two engineers were placed on leave after a briefing with Anton Valukas, a former federal prosecutor leading an internal investigation into the company’s handling of the flawed ignition switch.
“This is an interim step as we seek the truth about what happened,” Barra said in a statement. “It was a difficult decision, but I believe it is best for GM.”
The statement did not name the engineers. But they were identified in multiple news reports as Ray DeGiorgio, the project engineer responsible for the Cobalt ignition switch, and Gary Altman, an engineering manager.
Barra faced a barrage of questions in congressional hearings last week about GM’s slow recall, which was announced more than a decade after the company first noticed problems with the switches.
DeGiorgio’s work came in for especially harsh scrutiny after a lawmaker accused him of lying under oath during a deposition last year in a civil case brought by the family of a Cobalt crash victim. Sen. Claire McCaskill (D-Mo.), who chaired a Senate subcommittee hearing on the matter, said that DeGiorgio had switched out the unsafe ignition switches in several models in 2006 and then “covered it up” by using the same part number for the new switch.
Documents that GM turned over to Congress indicate that DeGiorgio approved a design change in 2006 that made the ignition switch less susceptible to being jostled, shutting down the engine and making the car more difficult to steer and stop. Turning off the ignition switch can also disable passenger air bags.
Asked during the hearing whether DeGiorgio had lied under oath, Barra hedged. “The data that’s been put in front of me indicates that, but I’m waiting for the full investigation,” she said. “I want to be fair.”
That answer angered lawmakers, who called on Barra to fire the engineer. In a statement Thursday, McCaskill called the suspensions long overdue.
“It’s about time,” the senator said. “Of the many frustrating moments in our hearing last week, an especially surreal one was learning that the GM employee who had obviously committed perjury hadn’t even been suspended and was still on the job in a role with a direct impact on the safety of GM’s products. This marks a small step in the right direction.”
GM fielded reports about trouble with the ignition switch for years before taking action to address the problem. Early on, engineers proposed a fix, but it was rejected, apparently for cost reasons. “None of the solutions presents an acceptable business case,” according to a GM memo given to congressional investigators.
GM’s slow recall has triggered investigations by Congress, federal safety regulators and federal prosecutors, who are looking into possible criminal charges against the giant automaker.
Barra, who took over as the company’s chief executive in mid-January, has said repeatedly that she is working to change the culture at GM, which she said was “cost-conscious” in the difficult years before the company’s 2009 bankruptcy and federal bailout.Last month, she announced the creation of a top executive position focused on vehicle safety.
Speaking at a worker town hall Thursday, Barra said the company has launched a program to recognize employees for ideas that make vehicles safer and for speaking up “when they see something that could affect customer safety,” the company said in a statement.“GM must embrace a culture where safety and quality come first,” Barra said.