General Motors has placed two engineers at the center of its delayed recall scandal on paid leave.
GM Chief Executive Mary Barra confirmed Thursday that engineers Ray DeGiorgio and Gary Altman were put on leave following a briefing from Anton Valukas, the former U.S. attorney overseeing an independent investigation into circumstances leading to a safety recall of 2.6 million older GM cars because of a faulty ignition switch.
“This is an interim step as we seek the truth about what happened,” Barra said. “It was a difficult decision, but I believe it is best for GM.”
The defect causes vehicles to shut off, disabling the airbags and other key functions, and has been linked to 13 deaths. GM has known about the problem for more than a decade but did not recall the cars until earlier this year.
The delay and the reasons behind the automaker’s failure to replace the switch are the subject of investigations from the National Highway Traffic Safety Administration, the Department of Justice and Congress.
At congressional hearings earlier this month, Sen. Claire McCaskill (D-Mo.) said GM had engaged in a "culture of coverup." She pointed to documents that showed DeGiorgio signed a 2006 memo about a redesigned ignition switch -- even though he swore during a legal deposition that he knew nothing about the change. GM did not give specific reasons why the engineers were put on leave.
GM is now paying fines of $7,000 a day for missing a NHTSA deadline to provide key information for the safety agency's investigation of why it took the company more than a decade to recall cars with faulty ignition switches.
Barra also said the automaker had created a “Speak Up for Safety” program to recognize employees for ideas that make vehicles safer, and for speaking up when they see something that could affect customer safety.
“GM must embrace a culture where safety and quality come first,” Barra said. “GM employees should raise safety concerns quickly and forcefully, and be recognized for doing so.”
Some analysts lauded Barra’s moves.
“Suspending these two engineers is another indicator of how seriously General Motors is taking this ignition switch recall,” said Karl Brauer, an analyst at Kelley Blue Book, the auto information company.
He said the suspension comes on top of Barra ordering an internal investigation and hiring a global safety chief, “and it gives merit to her claims of a 'new GM' that won't operate the way old GM did.”
But management consultant Kevin Paul Scott said Barra “either needs to show the buck stops with her and opt for full disclosure of everything or the board of directors needs to terminate her."
"Mary Barra has come off as compassionate so far, but now she needs to show that she is competent and capable to handle this situation," he said.
Barra, a longtime GM employee, was promoted to chief executive in January. She said she only started to learn about the ignition switch problem in December.