General Motors‘ monthly board of directors meeting comes at a pivotal time.
After three months of questioning executives, engineers and other GM insiders, former U.S. Attorney Anton Valukas is expected to deliver the results of his independent investigation to the automaker’s CEO and board as early as this week.
Though it’s unclear whether the findings of the report will be discussed at the board’s meeting, which takes place Monday, sources within the company said that once CEO Mary Barra gets the final report, she is likely to release the findings quickly.
At the heart of the investigation are these questions: Who at General Motors knew about the faulty ignition switch, and when did they know it? And why didn’t the automaker move faster to recall the switches in 1.3 million cars built between 2004 and 2008?
Two engineers, Ray DeGiorgio and Gary Altman, are of particular interest. In early April, Barra suspended both men—who worked on the switch in question—with pay, pending the results of the investigation.
According to testimony on Capitol Hill, in May 2006, DeGiorgio signed off on a change to the ignition switch, but did not authorize a new part number for the modified switches. During Barra’s testimony, the CEO admitted that this is not standard protocol.
Last week, reports out of Washington, D.C., said DeGiorgio was emotional when questioned by congressional investigators about the switch change. According the The New York Times, DeGiorgio said he did not realize he had failed to change the part number when he authorized strengthening a key part in the ignition switch.
Since news of the faulty switches broke, two other GM engineers have retired.
Changes after the report
Although the results of the internal investigation will get plenty of attention, the changes GM puts in place following the probe will be of greater interest to Wall Street analysts and investors.
Barra already has made several moves to shore up the company’s reputation when it comes to handling defects and recalls. Jeff Boyer was named vice president, global vehicle safety and, since taking over, he has overseen a review of complaints that has led to a wave of recalls. This year, GM has recalled more than 15 million vehicles worldwide.
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Within the last two weeks, General Motors raised the number of crashes linked to the faulty ignition switches to 47, from 31.
The company has also reported that there were 13 fatalities linked to accidents involving recalled vehicles where the airbag did not work because the ignition switch failed and cut power within the car. But lawyers for victims contend GM is underreporting the number of accidents and deaths linked to recalled vehicles.
In addition to releasing the report, GM is also expected to announce the structure of a compensation fund for victims of the ignition switch recall. That fund will be run by Ken Feinberg, who also oversaw victim compensation funds following the Sept. 11 terror attacks, the BP oil spill and the Boston Marathon bombings.
—By CNBC’s Phil LeBeau
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