CEO Mary Barra has disciplined some people at the heart of the GM recall crisis after three weeks of saying she would wait until an internal investigation was complete.
General Motors said Thursday it has put two engineers on paid leave, as the automaker continues to examine what happened (or didn’t happen) with identifying—and not moving more quickly—to remove a faulty part of the ignition switch. The company has recalled 2.6 million for the problem, which is blamed for at least 13 deaths.
Although GM did not identify the individuals involved, sources told CNBC that Gary Altman and Ray DeGiorgio are the two engineers who were put on leave.
Attempts to reach Altman and DeGiorgio for comment have been unsuccessful.
The disciplinary action came after Barra and GM leadership received an update from former U.S. Attorney Anton Valukas, who is conducting the company’s internal investigation into the recall.
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In a statement, Barra said, “This is an interim step as we seek the truth about what happened. It was a difficult decision, but I believe it is best for GM.”
Barra announced the decision at an employee town hall meeting, where a new internal initiative, “Speak Up For Safety,” was introduced. The campaign will encourage GM workers to come forward about concerns and questions they have regarding the safety of GM vehicles.
The dismissal of the two veteran engineers came following a hearing on Capitol Hill earlier this month, when Sen. Claire McCaskill, D-Mo., showed Barra a GM memo signed by DeGiorgio. It indicated he had approved a change to part of the ignition switch, despite previously saying he didn’t know about the change.
McCaskill: “So he has not been fired?”
Barra: “No he has not.”
McCaskill: “Is he still working there every day?”
McCaskill: “And you know that he lied under oath?”
Barra: “The data that has been put in front of me indicates that, but I am waiting for the full investigation. I want to be fair.”
McCaskill: “He said several times he had no idea these changes had been made. Here is a document that he signed under his name, Ray DiGiorgio. He signed it on April 26, 2006, approving of the change. Now it’s hard for me to imagine you would want him anywhere near engineering anything at General Motors under these circumstances. I for the life of me, I can’t understand why he still has his job. I know you want to be methodical, I know you want to be thorough, I know you want to get this right, but I think it sends exactly the wrong message that someone who perjures repeatedly under oath.”
After learning GM had disciplined two engineers, McCaskill issued a statement saying, “It’s about time.”
“Of the many frustrating moments in our hearing last week, an especially surreal one was learning that the GM employee who had obviously committed perjury hadn’t even been suspended and was still on the job in a role with a direct impact on the safety of GM’s products,” she said. “This marks a small step in the right direction for GM to take responsibility for poor—and possibly criminal—decisions that cost lives and put millions of American consumers at risk.”
Meanwhile, the Justice Department is moving forward with interviews of General Motors executives about what they knew and when. It’s unclear when those interviews will begin, how long they will last or which executives will be questioned.
It is all part of determining who had knowledge of the ignition switch problem, and if they committed any crimes in the way the recall was handled.
In the meantime, a team of specialists from NASA will be analyze data from General Motors to determine if it is still safe to drive the recalled vehicles with only the key in the ignition.
“NASA is independent and a good set of eyeballs to validate what GM is doing right or not doing right,” a source familiar with the investigation said.
—By CNBC’s Phil LeBeau. Questions? Comments?BehindTheWheel@cnbc.com.