General Motors was clueless, right up until February, about how many cars to recall for faulty ignition switches because employees couldn’t run meetings or complete what even the most half-assed high-school student learns to do—a basic research report.
The 325-page internal audit from former U.S. attorney Anton Valukas, hired by CEO Mary Barra in March to nip four federal investigations in the bud, is out in public. Barra has been blaming old GM’s “cost culture” for its 13-year delay in recalling 2.6 million cars that can shut off while driving, a purposeful delay many people deep inside GM knew was costing the company litigation and customer lives. In page after agonizing page, the scariest kink in the GM machine isn’t Ray DeGiorgio, the switch engineer turned whipping boy whose name appears 357 times and most certainly will never work in the industry again. It’s the wonder, a miracle even, that GM’s recklessness in developing the Saturn Ion, Chevrolet Cobalt, and associated models—and its callous disregard for the cars’ owners—hasn’t turned its current lineup to sludge.
Indeed, the Valukas report speaks of “silos” within GM, where departments were so walled off as to be completely useless to each other. Electrical engineers allegedly had no idea how the airbags were wired to the ignition system or what data their sensors would record. Lawyers tasked with spotting defect trends didn’t know how recalls worked. GM’s internal databases were so complicated that people simply gave up trying to look for documents that could have explained the switch failure years earlier. Worst of all, the report proves GM could have substituted a higher-torque switch-tumbler spring built for a Cadillac in 2001 at no additional cost.
No memory, no problem
All of GM’s top executives and board members, including Barra and her predecessors dating back to Rick Wagoner, have been cleared of any fault. That may sound like a premeditated conclusion, but given the details of GM’s R&D processes, it’s no stretch. DeGiorgio was a senior engineer at GM for 23 years who dedicated his career to designing ignition switches. During the Ion and Cobalt development in 2002, DeGiorgio knowingly approved switches built below his minimum 15 N-cm torque specification. This, he said, would be fine for the Ion but not for the Cobalt to follow, and when he reviewed suggestions to increase the torque, he rejected them because they would cause electrical problems. At this point, DeGiorgio called it the “switch from hell” and gave Delphi the green light. According to the report, he was the only person who approved the switch, there was no process within GM for documenting an out-of-spec part and no record the approval even happened. DeGiorgio claims to remember nothing.
When the Ion debuted in 2003, GM had received 65 reports of stalls and ignored them. During prototype drives, GM’s test engineers regarded the moving stalls as a “customer-convenience” item, not a safety defect. The same thing happened to Cobalt SS test drivers doing heel-and-toe downshifting. The sudden-stall condition appeared in three newspaper articles, from the Sunbury Daily Item to the New York Times, shortly after the Cobalt’s debut in 2005. At this point, customers were already demanding buybacks and GM was recording 20 to 30 stalls per 1000 cars, a limit GM engineers found acceptable. Only after the media reports did GM make an official investigation, and by then, they issued a technical service bulletin that purposely omitted the word “stall” so it wouldn’t trigger a response from the National Highway Traffic Safety Administration (GM still has some 69 such “hot” words that it bans engineers from using in company correspondence). In 2006, after feeling the heat from the press, DeGiorgio rejected using a “superior” switch from the Chevy Equinox and Saturn Vue because he thought the warranty costs to repair the current switch would be less than the bill for installing an improved version across the board on all Cobalts and Ions. But then DeGiorgio made his now infamous decision and approved a higher-torque switch without changing the part number, without filing for an exception and without telling anyone except Delphi. He never told any of his colleagues who were later “stuck” on the switch about any of his changes—not in meetings, emails or any conversation.
“To this day, in informal interviews and under oath, DeGiorgio claims not to remember authorizing the change to the ignition switch or his decision, at the same time, not to change the switch’s part number,” the report said. “DeGiorgio’s deliberate decision not to change the part number prevented investigators for years from learning what had actually taken place.”
Barra said there was no cover-up at all. But can anyone believe that now? The Energy and Commerce Committee in the U.S. House, who will call back Barra for further testimony, certainly won’t.
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Everyone outside the company knew more
In 2007, a Wisconsin state trooper and Indiana University figured out what was wrong with GM’s ignition switch. The trooper, investigating a fatal accident of a Cobalt driver in which the ignition key was in the accessory position and the airbags did not deploy, referenced GM’s own technical service bulletin from 2005 and made his case. It sat in GM’s own files, unread until this year. The Indiana University Transportation Research Center, in a court case, also came to the same theory. GM engineers, who did manage to read it, rejected the cause and never bothered to take apart two switches from newer and older Cobalts. All the while, GM staff were making bum theories about the airbag sensors losing electrical contact when driving over potholes and by 2012 were taking torque measurements in junkyards—with a fish scale they bought at a bait and tackle shop. One engineer wrote that stalling “has been around since man first lumbered out of [the] sea and stood on two feet.” Others freely admitted the keyhole change from the 2005 TSB was a “band-aid” and not a real fix.
William Kemp, a lawyer involved in the ignition-switch settlements and who was part of a team who allegedly kept the settlements below a $5 million threshold to keep them hidden from GM’s general counsel Michael Millikin, said it was “always disappointing when someone outside the company knows more about your product than you.”
Slow and steady
Even with actual torque wrenches, GM’s “master problem solvers”—the vaunted “Red X” team that was supposed to be the final word in parts investigations—gave up after lawyers refused to hand over switches from crashed cars. Finally, in 2013, an Atlanta lawyer put two seemingly identical Cobalt switches under an x-ray and found the culprit—one with a longer spring that likely would have prevented his client’s death. At this point, GM’s own lawyers waived the white flag.
“GM has known about this safety defect from the time the first 2005 Cobalts rolled off the assembly line and essentially has done nothing to correct the problem for the last nine years,” the lawyers wrote in a memo in 2013.
Executives waited another six months to validate the lawyer’s findings and then finally brought the evidence to the recall board, only for the recall to be delayed again because there wasn’t enough data on deaths. In January, when Barra was first told of the recall, key executives—many of whom were among the 15 fired—were still using incomplete information from yet another failed investigation that began in 2011. That gap led to GM expanding the recall because its management couldn’t figure out how many cars needed to be repaired. GM now estimates the number of deaths at 54, up from the original 13. There likely are many more.
Nods and salutes
The general atmosphere within GM, according to the report, can be best explained in hand gestures. One of them, the “GM nod,” is where everyone in a meeting nods their heads in agreement to do something, only to walk away and do nothing. The other, the “GM salute,” involves one employee crossing his arms and pointing fingers in opposite directions, signifying no responsibility.
While the Valukas report only tracks this one part and offers embarrassingly simple suggestions—take minutes of meetings, don’t delay recalls with more meetings, have someone senior sign off on critical decisions—we never imagined GM’s long-established bureaucracy to be this harmful, especially after it cleaned house in the 2009 bankruptcy. Whether GM’s radically improved models demonstrate that its business has changed or will eventually reveal more sloppy engineering is another story entirely.
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