Financial News

  • 6 June 2014, 6:34

GM Sacks 15 Employees For 'Pattern Of Neglect'

General Motors (GM) has sacked 15 employees after an internal probe found a "pattern of incompetence and neglect" in the automaker's handling of faulty ignition switch recalls.

The employees, including senior legal and engineering executives, were dismissed over the company's failure to disclose the defects, which have been linked to at least 13 deaths.

GM CEO Mary Barra, who announced the firings on Thursday to coincide with the release of the carmaker's†300-page report into the failure, said five other employees were disciplined over the delayed recalls.

GM began recalling older small cars in February - now totalling†2.6 million vehicles - despite evidence suggesting the company was aware of ignition switch problems as far back as 2001.

Ms Barra, who took over GM in January, called the internal investigation†"brutally tough and deeply troubling".

Speaking to employees at the company's technical centre outside Detroit, she†said: "I hate sharing this with you just as much as you hate hearing it.

"But I want you to hear it. I want you to remember it. I want you to never forget it."

The internal probe, headed by attorney Anton Valukas, included the review of 41 million documents and 230 employee interviews.

Ms Barra also announced that GM is establishing a compensation programme for families of victims and those who suffered serious injuries in accidents related to the faulty switches.

The programme is expected to begin taking claims on†August 1, she said.

GM has acknowledged links to 13 deaths, but trial lawyers involved in pending lawsuits†have put the death toll closer to 60.

The company agreed last month to pay a $35m (£21m) federal fine for concealing the defects for more than a decade.

Recalls in the first quarter cost the company†$1.3bn (£776m).

Congress is expected to announce a new round of hearings on the failings soon.†

US Representative Fred Upton, who chairs the House of Representatives' Energy and Commerce Committee, said the findings of GM's investigation are "deeply disturbing".