GM internal review faults corporate culture for ignition-switch debacle

A "disturbing pattern of incompetence" led to deaths.

General Motors has released the "Valukas Report," a 315-page summary on the ignition-switch fiasco that has the automaker on its heels. General Motors hired Anton Valukas, a former US Attorney now with the firm Jenner & Block, to conduct the investigation. By all reports, Valukas pulled no punches—the findings are damning and deeply disturbing. More on that in a second.

Valukas clears GM's executive management team of any wrongdoing, saying there was no cover-up, no conspiracy. 15 employees have been fired as a result of the findings in the report, but GM won't reveal who they are. They're almost assuredly not core members of GM's leadership team.

READ THIS: GM settles NHTSA recall probe, hit with record $35M fine

The level of incompetence detailed in the Valukas report is alarming. It paints a picture of a convoluted bureaucracy in which the ignition problems bounced from committee to committee, where the issues languished without being escalated up the management chain. Valukas calls this the "GM Nod," meaning that individuals left these meetings indicating they would work on fixing the problem, but then did nothing. It was always someone else's responsibility.

It's not like the "GM Nod" is some sort of new, unrecognized issue that's just coming to light now; current GM CEO Mary Barra is the one who described the phenomenon to Valukas.

Valukas describes an institutional myopia that apparently affected the core engineering teams tasked with designing, and later investigating, the defective ignition switch in question. While engineers recognized the part was sub-standard, no one apparently saw the link between an ignition switch that turned off too easily and disabled airbags. The ignition problem, which is said to be a factor in at least 13 driver deaths, was deemed a convenience issue, not a safety concern.

Instead of calling for a new switch, GM simply studied the problem for years, searching for some mythical root cause that would cure all of the company's ignition switch issues. In essence, it was an elaborate wild goose chase that seemed designed (and doomed) to ensure that nothing substantive actually happened.

READ THIS: GM's ignition-recall video isn't reassuring, it's scary

So what's GM going to do about it?

The Valukas report's recommendations are common-sense. In a company so sprawling, it's going to come down to institutional change and a focus on individual accountability. GM must create structures and processes that encourage workers to view issues they discover as potential safety problems—something employees had been pressured not to do in the past. Once identified, individuals and/or teams responsible for the problem areas must take ownership of them and be fully accountable, communicating openly with each other, GM management, the NHTSA, and all other interested stakeholders.

Will it work? Institutional change is slow. Change at GM is glacial. A culture of irresponsibility permeates the organization, and the report is clear: Fixing it will take a serious and sustained long-term effort. In the meantime, GM's executives slipped the noose this time around, but hopefully they won't be able to hide behind their ignorance the next time an issue like this arises.

No one at GM should feel any more comfortable. Barra will soon make a return visit to Capitol Hill, multiple criminal probes remain ongoing, and plaintiffs' attorneys will undoubtedly seize upon the Valukas Report findings to bolster their suits against General Motors. This story has a long way to go.

READ THIS: GM board of directors opens its own ignition-switch recall probe

Sources: The Valukas report; Recall Failures GM Fires 15 Employees Over (Wall Street Journal); The 'GM Nod:' 315 Scathing Pages on General Motors' Culture (Wall Street Journal)

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