GM's Recall Probe Expected To Clear Top Bosses Of Cover-Up: Report

An internal probe investigating General Motors Company’s (NYSE:GM) delay in recalling defective cars is expected to blame poor communication among managers but clear its top bosses of a cover-up in the controversy, a news report said Wednesday.

The probe is expected to conclude that there was no intentional cover-up by the automaker's top executives in the company's decision to delay the recall of vehicles with faulty ignition switches, which have so far been linked to scores of deaths. However, managers “operating in isolation” were responsible for ignoring the evidence that ultimately led to the fatalities, the Wall Street Journal reported, citing people familiar with the matter.

CEO Mary Barra, people who directly report to her, the board and Dan Akerson, the company’s former CEO, were unaware until last December of the malfunctioning switches, which were installed in 2.6 million cars, the probe will find, the Journal reported, adding that some company documents provided to Congress revealed that the problem about the faulty switches came to light in 2001, and that, in 2004 and 2005, managers decided not to redesign the switches because of the high costs involved.

The sources told the Journal that Barra is expected to present the findings of the investigation Thursday and announce the termination of “a number of people,” including Raymond DeGiorgio, the engineer who designed the switch and some other people associated with GM’s legal department. However, Michael Millikin, the company’s general counsel, is expected to remain in his job as the investigative report by Anton Valukas, a former U.S. prosecutor, will exonerate Millikin for mismanaging the safety issue and the delay of recalls, the Journal reported.

In late March, GM recalled 971,000 cars due to faulty ignition switches, taking the total number of cars recalled by the company to 2.6 million.

In April, the company said in a regulatory filing that it was facing five different government probes related to its recent recalls. According to GM, it was being investigated by the U.S. Attorney's Office for the Southern District of New York, the U.S. Securities and Exchange Commission, the National Highway Traffic Safety Administration, an unidentified state attorney general and Congress.