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Culture of committees at General Motors impeded problem-solving

By Keith Naughton and Jeff Plungis
Bloomberg News

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At the heart of General Motors’ slow response to fatally flawed ignition switches is a committee culture, outlined in the company’s timeline of events, that impeded the flow of information from the engineering ranks to the corner office.

The company first began investigating reports of faulty switches in 2004. Yet GM’s top executives, including new Chief Executive Officer Mary Barra, didn’t learn of the situation until “a few weeks ago,” she wrote on March 4. During that period, multiple layers of engineers and corporate committees analyzed and failed to fix a flaw that led to deaths of 12 people.

The number was changed from 13 to 12 after a review of crash documents. GM, in a March 5 letter to the U.S. National Highway Traffic Safety Administration, said one death associated with a Saturn Ion crash was counted twice. The letter was released on the agency’s website Tuesday.

GM told authorities that before announcing the recall, the company engaged in several internal probes featuring an array of committees that left federal bureaucrats baffled.

Now, GM is grappling with a recall of 1.6 million cars. The automaker will replace switches that could slip out of the “on” position when jarred or used with heavy key rings, cutting off power and deactivating air bags.

The House Energy and Commerce Committee will explore whether the automaker or the National Highway Traffic Safety Administration missed “something that could have flagged these problems sooner,” said Fred Upton, the panel’s chairman and a Michigan Republican. GM said it will fully cooperate with the panel.

In the Senate, Jay Rockefeller, a West Virginia Democrat, has asked for a subcommittee hearing on the matter from Claire McCaskill, a Missouri Democrat.

For Barra, the recall poses a challenge: Can the new CEO change the culture at a company where she has worked for 34 years?

“We’re looking for evidence that they can move more quickly,” said Brian Johnson, an auto analyst for Barclays. “The committee culture of the old GM was rooted in organizational paralysis and characterized by a lack of accountability.”

While the cars involved were built before the 2009 bankruptcy, the slow investigation into the ignition switches continued after GM was reborn as a supposedly leaner organization. The cars recalled were the 2003-07 Saturn Ion, 2005-07 Chevrolet Cobalt, 2006-07 Chevy HHR, 2006-07 Pontiac Solstice, 2007 Saturn Sky, 2007 Pontiac G5, 2005-06 Pontiac Pursuit in Canada and 2007 Open GT in Europe.

GM’s own timeline that it submitted to NHTSA shows how its investigation wound through a complex committee structure. In 2011, the automaker said the probe moved through a Field Performance Assessment (FPA), which conducted a Field Performance Evaluation (FPE) and assigned a Field Performance Assessment Engineer (FPAE). The engineer then presented findings to a Field Product Evaluation Recommendation Committee (FPERC), which may or may not be the same as the Field Performance Evaluation Review Committee (also FPERC), which received additional findings last year.

NHTSA asked GM to explain the difference, if any, between the two committees with the same acronym in a 27-page federal filing last week that included 107 questions the automaker must answer under oath.

“Are these two different committees?” wrote O. Kevin Vincent, NHTSA’s chief counsel. “If yes, describe the purpose of each committee. If no, explain the reason GM’s chronology uses two names for this committee.”

Barclays’ Johnson said he was amazed that “even the government bureaucrats” couldn’t understand GM’s plodding processes. Barra, an engineer who previously ran GM’s product development and human resources, needs to streamline its culture, he said.

“Someone who came from both an engineering and an HR background should be paying more attention to creating organizational processes that actually worked,” Johnson said. “But it’s too early to tell.”

As far back as 2004, GM had an opportunity to avoid a recall crisis, according to its timeline. Late that year, GM learned of a Chevy Cobalt losing engine power because the car key moved out of the run position in the ignition switch. Engineers identified the flaw and came up with solutions to fix it. Yet “after consideration of the lead time required, cost, and effectiveness of each of these solutions,” GM closed the investigation without taking any action, the automaker said.

Engineers came up with another solution to the flaw in 2005 that “was initially approved, but later canceled,” GM said. Instead, the automaker issued a “service bulletin” to dealers to fix the fault if customers asked about it. Dealers fixed it on 474 cars, GM said.

The automaker came up with a third fix in 2006, yet didn’t believe the new switch design had been implemented because the part number from its supplier, Delphi Mechatronics, didn’t change. GM now says the supplier, a unit of its former parts division Delphi Automotive, made the change “at some point during the 2007 model year” without informing the automaker.

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