GM Told to Show Ex-CEO Performance Review in Switch CaseLinda Sandler
A U.S. judge told General Motors Co. to give customers any portions of former Chief Executive Officer Rick Wagoner’s 2009 performance evaluation that relate to recalls and ignition-switch issues.
Wagoner may have watched a presentation showing stalling by the Chevrolet Cobalt about three weeks before he resigned in March 2009, GM’s paid investigator, Anton Valukas, has said. That finding was the first indication a CEO at the largest U.S. automaker had any knowledge of faults in the Cobalt’s ignition switch.
The order signed yesterday by U.S. District Judge Jesse Furman in Manhattan was made on the condition that Detroit-based GM finds the review document after a “reasonable” search.
Personnel files for 32 current and former GM employees were demanded by customers in a $10 billion car-price lawsuit against GM in Furman’s court and by the family of an accident victim suing in a Georgia state court. They’re trying to strengthen their case that GM hid a known flaw for at least a decade.
GM, which says it’s now focused on safety issues, will also turn over four years of performance ratings tied to pay for 26 people, including Ray DeGiorgio, the engineer in charge of the defective switch, and Mike Robinson, vice president of global regulatory affairs.
Robinson was the highest-ranking executive GM fired around the time Valukas published his June report, according to a person familiar with the matter.
“GM will comply with the court’s decision and provide the appropriate documents,” the company said in a statement today.
Mary Barra, who became CEO in January after more than 30 years at GM, has said she didn’t learn about company investigations into Cobalts until December 2013, and Valukas backed those statements. She said she learned about the stalling and switch recall in January, a month before it began.
GM is also to dig up separation agreements and disciplinary letters that might illuminate its handling of the switch.
The carmaker won the right to limit to the switch issue what it shows the customers. Lawyers in the $10 billion group suit wanted to see complete performance reviews, saying they would “provide valuable insight into GM’s troublesome corporate culture, where cost control was placed above safety.”
In a letter to Furman, the lawyers disputed Valukas’s findings on Barra, saying documents they got earlier from GM indicate she knew about the recall two months before making it public.
E-mails marked “urgent” from GM to supplier Delphi Automotive Plc ordered 500,000 switches for Chevrolet Cobalts and other small cars by Dec. 18, according to communications made public by the lawyers.
The $2.6 million Delphi order was small for GM. In an average week, it orders about $40 million of parts from suppliers, Alan Adler, a GM spokesman, said.
Barra was in transition at the time. Formerly GM’s product chief, she was named Dec. 10 to succeed the retiring Dan Akerson as CEO and took over Jan. 15.
GM fell 25 cents to $31.98 at 2:40 p.m. in New York trading. The shares dropped 21 percent this year before today.
Separately, GM asked Furman to put off taking customers’ arguments in support of their suit until a bankruptcy judge decides whether they have a right to demand money from the carmaker.
U.S. Bankruptcy Judge Robert Gerber ruled in the company’s 2009 reorganization that it can’t be sued for its predecessor’s errors. The customers are pressing to go ahead, saying Gerber can’t free GM from its own mistakes.
The automaker said in a filing yesterday that most of the customers are claiming compensation for cars made by so-called old GM, the pre-bankruptcy entity. Only nine out of 68 sets of named plaintiffs across seven states “definitively assert that they purchased vehicles manufactured by New GM,” the company told Furman.
The car-price suits are In re General Motors LLC Ignition Switch Litigation, 14-md-02543, U.S. District Court, Southern District of New York (Manhattan).