tqm case study gm motor works

7/21/2019 TQM Case Study GM Motor Works

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GM CEO: 15 fired over ignition

switch recalls; probe showspattern of failures, no coverupGM CEO Mary Barra revealed the findings of an internal probe into why the company did

not recall faulty ignition switches earlier and detailed the company's actions, including firing

15 employees.

BY MICHAEL A. FLETCHERJune 5

A pattern of incompetence and neglect led to the long failure to recall

millions of General Motors small cars over a deadly ignition switch defect, but

there was no conspiracy to hide the problem, the companys chief executive

said Thursday.

Outlining the results of an internal probe, GM chief executive Mary T. Barra

said 15 employees deemed responsible for not vigorously tackling the problem

have been forced out of the company, and five others have been disciplined.

But theinvestigation by Anton R. Valukas,a former U.S. attorney, did not tiethe problems to top executives in the company.

Rather than finding a coverup, the investigation revealed an ingrained

corporate culture in which employees failed to take responsibility for the

ignition-switch problem or treat it with urgency. Investigators misdiagnosed

it, and information that could have helped unravel the mystery remained

trapped in GMs bureaucratic silos, even as accidents and fatalities mounted.

The report described the GM nod, where company officials would attend a

meeting, nod in agreement on a proposed course of action, and then leave and

do nothing.
http://apps.washingtonpost.com/g/page/business/general-motors-report-regarding-ignition-switch-recall/1085/http://apps.washingtonpost.com/g/page/business/general-motors-report-regarding-ignition-switch-recall/1085/http://apps.washingtonpost.com/g/page/business/general-motors-report-regarding-ignition-switch-recall/1085/http://apps.washingtonpost.com/g/page/business/general-motors-report-regarding-ignition-switch-recall/1085/


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That culture contributed to GMs waiting more than a decade torecall 2.6

million Chevrolet Cobaltsand other small cars equipped with the defective

switch,which has been linked to at least 13 deaths and 54 accidents, the report

said.

Engineer Mark Hood shows the ignition assembly, which has a faulty 2005 ignition switch

(black piece at left). McSwain Engineering Inc. helped conduct engineering investigations.

The failure analysis resulted in the recall of 1.65 million GM vehicles. (Michael

Spooneybarger/Reuters)

Barra, a GM lifer who took over as chief executive in January, has vowed to

break that pattern, which contributed to the companys decline and eventual

2009 bankruptcy and federal bailout.

Despite the ignition switch debacle, GM sales have been strong in recent

months and its future has appeared bright, continuing a trajectory the

company has been on since it emerged from bankruptcy.

GM now logs one-third of its sales in China, the worlds fastest-growing auto

market. And this week, GM reported that in May it had its best sales month in

nearly six years.

But for the company to continue that momentum, analysts said, Barra and

other leaders must persuade consumers that GM has shed its old ways.

It is a real trick to say we had a decade of a pattern of incompetence and I

wasnt a part of it,said Daniel G. Hill, president Ervin Hill Strategy, a crisis-

management firm. Part of their effort is to convince consumers that the new

GM is not the old GM.

The report said that GM had problems with the ignition switch from the

beginning. The part never met GM specifications, but an engineer approved it
http://www.washingtonpost.com/business/economy/general-motors-recalls-another-27-million-vehicles/2014/05/15/f8bce616-dc40-11e3-bda1-9b46b2066796_story.htmlhttp://www.washingtonpost.com/business/economy/general-motors-recalls-another-27-million-vehicles/2014/05/15/f8bce616-dc40-11e3-bda1-9b46b2066796_story.htmlhttp://www.washingtonpost.com/business/economy/general-motors-recalls-another-27-million-vehicles/2014/05/15/f8bce616-dc40-11e3-bda1-9b46b2066796_story.htmlhttp://www.washingtonpost.com/business/economy/general-motors-recalls-another-27-million-vehicles/2014/05/15/f8bce616-dc40-11e3-bda1-9b46b2066796_story.htmlhttp://www.washingtonpost.com/business/economy/gm-held-preliminary-talks-with-victims-of-defective-ignition-switches/2014/05/02/8d341aa8-d22d-11e3-9e25-188ebe1fa93b_story.htmlhttp://www.washingtonpost.com/business/economy/gm-held-preliminary-talks-with-victims-of-defective-ignition-switches/2014/05/02/8d341aa8-d22d-11e3-9e25-188ebe1fa93b_story.htmlhttp://www.washingtonpost.com/business/economy/gm-held-preliminary-talks-with-victims-of-defective-ignition-switches/2014/05/02/8d341aa8-d22d-11e3-9e25-188ebe1fa93b_story.htmlhttp://www.washingtonpost.com/business/economy/gm-held-preliminary-talks-with-victims-of-defective-ignition-switches/2014/05/02/8d341aa8-d22d-11e3-9e25-188ebe1fa93b_story.htmlhttp://www.washingtonpost.com/business/economy/gm-held-preliminary-talks-with-victims-of-defective-ignition-switches/2014/05/02/8d341aa8-d22d-11e3-9e25-188ebe1fa93b_story.htmlhttp://www.washingtonpost.com/business/economy/gm-held-preliminary-talks-with-victims-of-defective-ignition-switches/2014/05/02/8d341aa8-d22d-11e3-9e25-188ebe1fa93b_story.htmlhttp://www.washingtonpost.com/business/economy/general-motors-recalls-another-27-million-vehicles/2014/05/15/f8bce616-dc40-11e3-bda1-9b46b2066796_story.htmlhttp://www.washingtonpost.com/business/economy/general-motors-recalls-another-27-million-vehicles/2014/05/15/f8bce616-dc40-11e3-bda1-9b46b2066796_story.html


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for use anyway a decision that complicated later efforts to solve the

problem.

At first, the parts electrical system was so balky that it had to be redesigned.Then the switch was found to not have enough torque, allowing it to be

accidently switched off, sometimes when a drivers knee hit the steering

column or a key ring was heavily weighted down.

Complaints flowed almost from the start. The lead engineer for the part, Ray

DeGiorgio, even once called it the switch from hell, in a missive to parts

supplier Delphi, the report said.

DeGiorgio, primarily concerned about the electrical problems that caused the

switch to have trouble starting cars in cold weather, repeatedly pushed against

efforts to address the torque problem, which he did not know posed a danger

to drivers, the report said.

In 2006, DeGiorgio one of the employees dismissed by GM approved a

new design for the part without documenting the change or alerting executives

who could have ordered a recall, according to the report. In a 2013 deposition

taken in connection with a suit against GM, DeGiorgio denied making the

change. The report said he has steadfastly insisted that he simply forgot about

it.

DeGiorgio could not be reached for comment for this article. But in his 2013

deposition, he said his son drove a 2007 Cobalt that he helped him buy tocommute to school. There is no way I would have done that I gave this car

to my kid had I had any reservations, DeGiorgio said.


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The change largely addressed the defect in later-model GM small cars, another

factor that misled the company about the nature of the problem.

Still, the report concluded that GM should have been able to solve the problembut that the companys efforts at investigating it were neither diligent nor

incisive.

The company did not push harder to address the problem, in large part

because it did not understand it. Engineers and others who looked into the

ignition-switch problem, which caused cars to inadvertently stall, did not

realize that the defect also disabled air bags.

Consequently, for years GM viewed the issue not as a safety problem but

simply as one of customer convenience annoying but not particularly

problematic, the report said.

Once so defined, the switch problem received less attention, and efforts to fix

it were impacted by cost considerations that would have been immaterial had

the problem been properly categorized in the first instance, the report said.

GM officials continued to misunderstand the problem even as accidents and

legal settlements mounted, and outside investigators began to see the switch

problem as a pressing safety issue, the report said.

Describing the reports findings in a town hall meeting with 1,200 GM workers

at a GM technical facility in Warren, Mich., Barra said employees did notshare enough information or take enough initiative as evidence came in about

the faulty switches, leading to tragic results.

If this information had been disclosed, I believe in my heart the company

would have dealt with this matter appropriately, Barra said.


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GM has shared the report with federal safety officials and members of

Congress. Rep. Fred Upton (R-Mich.), whose committee has been

investigating therecall,said a subcommittee of his panel will hold a second

round of hearings in several weeks.

Meanwhile, Sen. Claire McCaskill (D-Mo.), who is leading the Senate probe,

also promised another hearing.

Im looking forward to getting a full briefing fromMr. Valukas. I wont be

letting GM leadership, or federal regulators, escape accountability for these

tragedies, she said.

The report was released after the ignition-switch problem triggered a series of

government investigations and lawsuits that prompted Barra to restructure

GMs top ranks to more quickly deal with safety problems. So far this year, the

automaker has ordered 30 recalls affecting nearly 16 million vehicles in North

America. The recalls alone have cost the automaker $1.7 billion.

And the troubles stemming from the deadly defect are far from over. Last

month, the National Highway Traffic Safety Administration levieda

$35 million fine against GM,the maximum amount allowed.

The company has hired mediation specialist Kenneth R. Feinberg to create a

compensation fund for families of crash victims by Aug. 1. On Thursday,

Feinberg said, I have already drafted some preliminary compensation ideas

and plan to share them in confidence over the next few weeks with lawyers,public-interest groups, GM and others interested in the compensation

program.
http://www.washingtonpost.com/business/economy/gm-recalls-24-million-more-vehicles-setting-new-record/2014/05/20/79911fba-e046-11e3-810f-764fe508b82d_story.htmlhttp://www.washingtonpost.com/business/economy/gm-recalls-24-million-more-vehicles-setting-new-record/2014/05/20/79911fba-e046-11e3-810f-764fe508b82d_story.htmlhttp://www.washingtonpost.com/business/economy/gm-recalls-24-million-more-vehicles-setting-new-record/2014/05/20/79911fba-e046-11e3-810f-764fe508b82d_story.htmlhttp://www.washingtonpost.com/business/economy/gm-fined-35-million-in-ignition-switch-safety-case/2014/05/16/f1b92e56-dd08-11e3-8009-71de85b9c527_story.htmlhttp://www.washingtonpost.com/business/economy/gm-fined-35-million-in-ignition-switch-safety-case/2014/05/16/f1b92e56-dd08-11e3-8009-71de85b9c527_story.htmlhttp://www.washingtonpost.com/business/economy/gm-fined-35-million-in-ignition-switch-safety-case/2014/05/16/f1b92e56-dd08-11e3-8009-71de85b9c527_story.htmlhttp://www.washingtonpost.com/business/economy/gm-fined-35-million-in-ignition-switch-safety-case/2014/05/16/f1b92e56-dd08-11e3-8009-71de85b9c527_story.htmlhttp://www.washingtonpost.com/business/economy/gm-fined-35-million-in-ignition-switch-safety-case/2014/05/16/f1b92e56-dd08-11e3-8009-71de85b9c527_story.htmlhttp://www.washingtonpost.com/business/economy/gm-fined-35-million-in-ignition-switch-safety-case/2014/05/16/f1b92e56-dd08-11e3-8009-71de85b9c527_story.htmlhttp://www.washingtonpost.com/business/economy/gm-recalls-24-million-more-vehicles-setting-new-record/2014/05/20/79911fba-e046-11e3-810f-764fe508b82d_story.html


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The company also faces lawsuits from shareholders, dealers and others in

connection with the defect. It is also under a series of government

investigations, including a federal criminal probe that could result in financial

penalties along the lines of the $1.2 billion paid by Toyota earlier this year formisleading consumers about unintended acceleration problems with several of

its models.

Karl Brauer, an analyst with the automobile research firm Kelley Blue Book,

said GM is showing signs that the ignition-switch recalls will not do lasting

damage to its sales.

The company on the product side has done a very good job over the last four

years, Brauer said. Consumers are more impressed by that than they are

concerned by the recall issues.

In a conference call with analysts to discuss the report, Barra declared that the

ignition-switch problems are not characteristic of current-day GM.

We look at this as a unique series of mistakes that were made over a long

period of time, she said.

I, as a Marketing Student, first and foremost, firing 15 employees and most of them were

senior executives isnt fair without any deeper investigation made. The technical matter that

deals with the ignition, safety and security of our consumers is the main issue.

tqm case study gm motor works

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