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GM says recalls have had no meaningful impact on sales

Thursday, June 05, 2014 - 02:27

June 05 - General Motors’ internal report on its ignition switch recall tied to 13 deaths reveals incompetence, but not a conspiracy. Those let go were not at the most senior levels. Bobbi Rebell reports.

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General Motors says it fired 15 people over its ignition switch recall scandal- but those names did not include the most senior level executives- CEO Mary Barra-saying they were simply unaware of the problems. SOUNDBITE: MARY BARRA, CEO, GENERAL MOTORS (ENGLISH) SAYING: "There was no conspiracy by the corporation to cover up facts. In addition, the investigators found no evidence that any employee made a trade off between safety and cost. The pattern in this case is much more complex and nuanced. What Valukas found was a pattern of management deficiencies, and misjudgments, often based on incomplete data that were passed off at the time as business as usual. Unfortunately, the report found that these seemingly benign actions led to devastating consequences. In short we misdiagnosed the problem from the very beginning." Barra gave few specifics as she unveiled parts of a 300 page internal report- prepared by Anton Valukas- and did not say how the problem was allowed to fester for more than 11 years. GM confirmed it will soon begin compensating victims of crashes linked to the faulty ignition switches- and said the number of fatalities related to the defect may rise. GM has reported 13 deaths. So far GM has recalled 2.6 million cars because of the problem. The total cost of these and other recalls this year? $1.7 billion dollars. Ironically, while lawsuits continue to be filed on this issue- consumers have been taking all this in stride- May sales were up 13 percent compared to a year ago. Edmunds.com's Jessica Caldwell: SOUNDBITE: JESSICA CALDWELL, SENIOR ANALYST, EDMUNDS.COM (ENGLISH) SAYING: "It seems like they should have already turned away. I think if you look at the news out there I mean hearings, you are constantly hearing about millions and millions of GM vehicles being recalled and yet not only are we seeing more people are trading in their cars to buy new cars- talking about the new Cobalt, but they are also buying GM cars at a higher percentage. So it looks like this has completely flipped and this is a sales opportunity for GM rather than customers not wanting to buy GM products." Now that GM's internal investigation has been submitted, Congress is expected to announce a new round of hearings soon. Details on compensation for victims are expected by early August.