GM expects recall probe won't implicate CEO

Bill Vlasic

The moment captured a new sense of confidence that General Motors has been anxiously awaiting from Mary T. Barra, its embattled chief executive.

At a meeting on May 28 with 2,000 of G.M.'s sales and marketing employees, Ms. Barra sounded nothing like a leader under fire for the company's failure to recall millions of defective cars for more than a decade.

Instead, she came across as a chief executive who fully expects to survive a crucial internal investigation of the recall that could be made public as soon as this week. "They keep saying the recall is hurting us, but you keep proving them wrong," she said to cheers from the crowd. "I believe in this team, and I know you can do it."

Mary Barra, chief executive officer of General Motors Co.
Andrew Harrer | Bloomberg | Getty Images

G.M. will surely face skeptics of its in-house inquiry into the recall crisis.

But now G.M. officials increasingly believe that Ms. Barra will be cleared of wrongdoing in the recall crisis after a three-month investigation by Anton R. Valukas, the former United States attorney.

Her tone at the sales meeting was almost defiant, and a far cry from her defensive posture at two congressional hearings in April.

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It was the kind of rousing speech that has been missing at G.M. since Ms. Barra, just weeks into her tenure, and the entire company came under a cloud of suspicion for its delay in recalling cars with faulty ignition switches that it has tied to 13 deaths.

Mr. Valukas's report is expected to name executives, employees and departments within G.M. responsible for the delayed recall, and recommend broad corporate and personnel changes at the nation's largest automaker.

The departments under the most scrutiny are engineering, legal, product investigations and regulatory affairs — all of which had knowledge of the switch problems at various times, according to company documents given to regulators.

Yet the top officers of the company, particularly Ms. Barra, have yet to be directly tied to G.M.'s failure to recall older-model Chevrolet Cobalts and other defective small cars.

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At least one senior officer, the general counsel Michael P. Millikin, whose department has been a major focus of the inquiry, has been assisting Mr. Valukas.

Company officials, who spoke on condition of anonymity, said Ms. Barra, who has been briefed on the investigation's progress, cleared a critical hurdle last month when the nation's auto safety agency imposed a $35 million fine on G.M. for failing to report the defect in a timely manner.

David J. Friedman, the acting chief of that agency, the National Highway Traffic Safety Administration, was asked on May 16 if his review of 200,000 internal G.M. documents showed that Ms. Barra knew of the problem before the recall was ordered.

"I don't have any records of that," he said.

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Since then, G.M. officials have been more aggressive in defending Ms. Barra, both publicly and privately. One official said that evidence linking her to the delay did not exist. And the company's previous chief executive, Daniel F. Akerson, broke his silence on the subject in an article about Ms. Barra in Forbes magazine.

"She didn't know about it," Mr. Akerson was quoted as saying. "I bet my life on it."

In recent weeks, Ms. Barra has subtly stepped up her traditional duties as chief executive, including holding more employee meetings, interviewing high-level job candidates, and presiding at the start of the G.M.-sponsored Grand Prix race in Detroit last Sunday.

Since the ignition switch recall was formally announced in February, G.M. has relied heavily on Ms. Barra to lead the company through the crisis, including using her as its sole voice during congressional hearings.

Now, G.M. desperately needs Mr. Valukas to clear Ms. Barra of complicity in the recall.

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With the automaker still facing a number of government investigations and another round of hearings in Washington, G.M. is counting on Ms. Barra to begin the long process of restoring its credibility with lawmakers, regulators and consumers.

That will not be an easy task. Ms. Barra has already consistently deflected questions about G.M.'s actions until the report by Mr. Valukas was complete.

And it is unlikely that the report will placate the company's harshest critics, including lawmakers and lawyers representing accident victims and their families.

The report, they note, was commissioned and paid for by G.M. And there are questions over his law firm's previous ties to the automaker.

Mr. Valukas is the chairman of Jenner & Block, which has represented G.M. in securities work. The other law firm involved in the inquiry, King & Spalding, has defended the automaker in product-liability cases, including one that discovered the defect. "There is so much riding on this report for Mary Barra," said Harvey L. Pitt, the former head of the Securities and Exchange Commission. "Lots of questions have been raised, and now she will have to answer them."

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Ms. Barra still has yet to explain why she was unaware of various internal studies of the switch problem during her tenure as G.M.'s head of product development from 2011 to 2013.

She also has not talked about a wrongful-death lawsuit that G.M. settled last year only after depositions were taken from G.M. engineers — two of whom have since been suspended for their role in the delayed recall.

In that case, one of Ms. Barra's chief product lieutenants avoided testifying under oath because of a sudden decision by G.M. lawyers to settle the suit under terms of confidentiality.

G.M. has declined to make Ms. Barra or Mr. Valukas available for interviews.

In her congressional testimony and other public statements, Ms. Barra has acknowledged that something went "terribly wrong" inside G.M. that allowed a defective switch to exist in its vehicles as far back as 2001.

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She has already ordered major changes in the company's safety and engineering departments. In addition, four executives have left the company since the recall.

Ms. Barra has vowed to discipline or fire employees found responsible for the safety problems by Mr. Valukas. In the meantime, the company is rallying behind her.

In a brief telephone conversation, Mr. Akerson — who pushed for Ms. Barra's promotion to chief executive — said G.M. was unified in its support of her.

"I think Mary has stated our position quite clearly on the switch," Mr. Akerson said. "And that's all I have to say."

— By Bill Vlasic, The New York Times