Saturday, February 24, 2018
Business

GM suspends 2 engineers amid recall investigation

DETROIT — General Motors has suspended two engineers in the first disciplinary action stemming from its mishandled recall of 2.6 million small cars for a deadly ignition switch problem. But the company also said a second ignition part in the cars must be fixed, boosting first-quarter recall costs above $1 billion.

The suspensions, with pay, come from GM's own investigation into the recall. CEO Mary Barra promised Congress last week that she'd take action when appropriate, as lawmakers alleged that at least one company engineer tried to cover up the switch problem.

In a statement Thursday, Barra called the action an "interim step." Management and legal experts said paid leave is likely the first step in a process that could lead to firing or early retirement. But it also means that GM probably doesn't know yet if the engineers acted on their own or followed orders from a superior. GM did not give specific reasons why the two engineers, widely reported to be Ray DeGiorgio and Gary Altman, were put on leave.

GM says at least 13 people have been killed in crashes linked to the defective switch, but family members of those who died say the death toll is much higher.

GM's worldwide recall of mostly Chevrolet Cobalts and Saturn Ions is to replace the faulty ignition switches. On Thursday, it announced that dealers would also replace the ignition lock cylinders on the same cars because drivers can remove the key while the engine is still running. That could lead to a roll-away or crash. GM said it knows of one related injury.

In the past two months, GM has announced recalls covering a total of 6.3 million vehicles for a number of issues. The estimated cost has now grown to $1.3 billion from $300 million initially.

Experts say the paid suspensions likely follow GM's process for getting rid of employees while protecting the company from unknowns that may come out in GM's internal investigation being led by former U.S. Attorney Anton Valukas.

"They have to be careful at this point not to overreact, despite all the pressure that's being put on them certainly by Congress, public pressure," said Peter Henning, a law professor at Wayne State University in Detroit and a former federal prosecutor. "I've got to believe they have an HR (human resources) binder that would sink a battleship. Step one is usually paid leave," he said.

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