General Motors Co. is setting up a compensation fund for families of victims and those who have suffered serious physical injuries as the result of faulty ignition switches in millions of vehicles linked to at least 13 deaths and 47 crashes.Watch video
WARREN, MI- General Motors Co. is setting up a compensation fund for families of victims and those who have suffered serious physical injuries as the result of faulty ignition switches in millions of vehicles linked to at least 13 deaths and 47 crashes.
Renown compensation attorney Kenneth Feinberg, according to GM, is independently administering and evaluating details of the program, which GM says could lead to an increase in the number of fatalities linked to the 2.6 million recalled small cars.
GM CEO Mary Barra announced the fund during an employee town hall meeting Thursday morning at its Warren Technical Center to discuss a "deeply troubling" report from former U.S. attorney Anton Valukas into why it took the Detroit-based automaker years to recall the vehicles.
GM President Dan Ammann, who has been leading the efforts to set up the compensation program, said exact details of the compensation fund, including eligibility and rules should be ready in "the coming weeks" with GM ready to accept claims Aug. 1.
General Motors President Dan Ammann (l to r), CEO Mary Barra and Executive Vice President Mark Reuss answer questions from media after Barra provided an update on the ignition switch recall investigation Thursday, June 5, 2014 at the GM Vehicle Engineering Center in Warren, Mich. "The most important thing we can do right now is to reach out and find all of the people, all of the people that have been impacted, lost loved ones, suffered serious physical injuries as a result of this ignition switch defect," Ammann said during a press conference following the town hall. It's so important, we independently found the best person we possibly could to administer this program."
Ammann would not speculate on financial details of the account or how many individuals are expected to be eligible for the fund.
GM announced hiring Feinberg, who has overseen compensation in high-profile tragedies such as the Sept. 11 terrorist attacks and the Virginia Tech school shooting, during a Congressional hearing April 1 investigating why GM took so long to recall the vehicles when they knew there was a problem.
According to testimony and documents submitted to a Congress subcommittee, GM knew about the faulty ignition switches in the early-2000s, but did not officially start recalling the vehicles until February of this year.
Barra said GM, when launching the vehicles with the faulty ignition switches, considered the defect a "customer satisfaction" problem instead of a safety issue. Experienced engineers, she said, didn't understand that the airbags would not deploy if the ignition switch changed position.
"Repeatedly, individuals failed to disclose critical pieces of information that could have fundamentally changed the lives of those impacted by a faulty ignition switch," said Barra, adding what Valukas uncovered "is a pattern of incompetence and neglect."
GM faces a number of government investigations and lawsuits over the defective parts.
In May, the U.S. Department of Transportation and its National Highway Traffic Safety Administration already fined GM an unprecedented $35 million over the delayed ignition switch recall.
Separately from the compensation fund, Barra also announced 15 GM employees who "acted inappropriately" or didn't do enough to flag the ignition switch defect are no longer employed by the company. Five other employees, Barra said, have been disciplined.
The names of the 20 employees, including "a disproportionate number" of senior leaders and executives, will not be made public, Barra said. She did confirm that the two engineers -- reportedly Ray DeGiorgio and Gary Altman -- who were previously put on paid leave are no longer with the company.
Officials would not comment on how many employees were fired or asked to leave or take early retirement.
General Motors CEO Mary Barra provides an update on the ignition switch recall investigation Thursday, June 5, 2014 during a employee meeting at the GM Vehicle Engineering Center in Warren, Michigan. (Photo by Steve Fecht for General Motors) "I'm not commenting on any specific individuals other than the two people that we put on administrative leave," said Barra, adding senior leadership made the decisions to not include the names being released.
Barra, who became CEO Jan. 15, said Valukas and his team conducted more than 350 interviews with more than 230 people and analyzed more than 41 million documents. Interviews included past and present employees and a number of third parties.
The report, which the National Highway Traffic Safety Administration published online, found evidence of "a pattern of management deficiencies and misjudgments," but no cover up by the corporation.
The faulty ignition switches can move out of the "run" position to the "accessory" or "off" positions, leading to a loss of power. The risk may be increased if the key ring is carrying added weight or if the vehicle goes off road or experiences some jarring event, including rough roads. If the key turns to one of those positions, officials say the front air bags may not work if there's a crash.
As of Wednesday night, Barra said GM has produced more than 280,000 kits to fix the defective ignition switches and fixed roughly 113,000 vehicles.
The 2.6 million vehicles, including 2.2 million in the U.S., affected by the ignition switch recall include 2003-2007 Saturn Ions, 2007-2010 Saturn Skys, 2005-2011 Chevrolet HHRs, 2006-2010 Pontiac Solstices, and 2005-10 Chevrolet Cobalt and Pontiac G5 models.
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Michael Wayland covers the automotive industry for MLive. Email him at MWayland@mlive.com & follow him on Twitter @MikeWayland or Google+.