General Motors has placed two senior engineers on paid leave as it drills down in an internal investigation intended to find out why the company waited as much as a decade to initiate the recall of a faulty ignition switch linked to at least 31 crashes and 13 deaths.
The move comes as GM brings in NASA to determine whether it is safe for owners to continue driving the 2.6 million vehicles recalled because of the ignition switch problem until repairs can be made. With parts beginning to flow to GM dealerships, repairs began this week but the process could take months to complete, according to industry observers.
Meanwhile, GM says that it will do additional repairs on those vehicles beyond the basic, flawed ignition switch. It also will replace their ignition lock cylinder to ensure the key cannot be removed while the vehicle is running. If that were to happen, the maker noted, it could lead to a possible rollaway or crash, resulting in injuries to passengers and pedestrians.
(For more on NASA’s involvement in the GM controversy, Click Here.)
GM also said it now expects the ignition switch problem – along with a variety of other recalls it announced during the first quarter of the year – to generate one-time charges of $1.3 billion. The maker has steadily increased that figure, initially forecasting a $300 million write-down, then increasing the figure to $750 million on March 31st.
The decision to place two veteran engineers on leave comes as little surprise to industry observers who had wondered when GM might decide to hold someone accountable for the mishandled recall that has sorely tarnished its image – and which may ultimately result in criminal charges as the result of a new investigation launched by the U.S. Justice Department.
Though GM did not identify the two men, reports have confirmed that are Gary Altman, who previously served as program engineering manager for the Chevrolet Cobalt, and Ray DeGiorgio, a project engineer for both the Cobalt and Saturn Ion. Those two vehicles were among a mix of products equipped with the faulty ignition switches.
Both men were identified during two days of hearings on Capitol Hill earlier this week, but the decision to put them on paid leave comes as former U.S. attorney Anton Valukas moves forward with an independent investigation GM authorized.
“This is an interim step as we seek the truth about what happened,” said CEO Mary Barra, in a company statement. “It was a difficult decision, but I believe it is best for GM.”
Documents produced during last week’s hearings indicated GM declined to recall the vehicle prior to this year because it could not make a “business case,” even though the actual part itself might cost as little as 90 cents. The labor involved in repairing each vehicle is expected to run less than a half hour, however, which would bring the bill up closer to $40 to $50 per car based on standard dealership labor rates.
(GM facing $7,000/day fine for delaying response on ignition switch recall. Click Here for the story.)
Senator Claire McCaskill, a Missouri Democrat who was among the harshest critics of GM – and CEO Barra – during last week’s hearings, called the move to suspend the two engineers, “a step in the right direction.”
“It’s about time,” stressed McCaskill, who had directly identified DeGeorgio during the Senate hearing. “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.”
It’s unclear whether any other engineers or managers at GM will be punished for their role in what has come to be dubbed “Switch-gate.” For her part, Barra is racing to shore up GM’s image while also sending the message out to employees that the maker has adopted a new corporate attitude embracing safety, even if it requires employees to serve as whistleblowers.
“GM must embrace a culture where safety and quality come first,” she said during an employee town hall meeting on Thursday morning. Rather than penalize those who speak out, she added, “We will recognize employees who discover and report safety issues to fix problems that could have been found earlier and identify ways to make vehicles safer.”
(GM investing nearly $500 million to prepare for next Chevy Volt plug-in launch. Click Here for more.)
Tags: auto news, car news, gm $1.3 billion recall charge, gm expands recall, gm ignition switch, gm ignition switch recall, gm news, gm suspends two engineers, mary barra, paul a. eisenstein, paul eisenstein, thedetroitbureau, two gm engineers on paid leave