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Posted on June 5, 2014February 20, 2019

GM dismisses 15 employees as internal probe is released

10 years ago

DETROIT — General Motors has dismissed 15 employees, including at least eight executives, after an internal investigation found “a pattern of incompetence and neglect” that led to 11 years of delays in recalling millions of cars for a fatal defect, CEO Mary Barra said today.

Barra promised that the company would address future safety issues far differently, warning employees that failing to report risks would make them “part of the problem” and even inviting them to contact her directly if they couldn’t get potential defects addressed themselves.

She said the report by former federal prosecutor Anton Valukas found no evidence of an intentional cover-up or that “any employee made a tradeoff between safety and cost,” concluding that employees initially believed it to be a customer-satisfaction issue rather than one that could lead to crashes or deaths.

Barra said GM plans to set up a compensation fund for people affected by crashes related to the ignition switch, though details about the plan have not been finalized yet.

GM executives said the eligibility rules for the compensation fund would be set by Feinberg, meaning he could decide to count deaths that are not among the 13 that GM has tallied.

President Dan Ammann said victims or the families of those killed could opt out of the fund and choose to pursue a traditional lawsuit but that if they do they will have “the same legal rights that they do today.”

That means GM could assert in court that it is not liable for pre-bankruptcy crashes. Ten of the 12 deaths identified by Automotive News and many of the non-fatal crashes occurred before GM’s bankruptcy.

New committee

GM Chairman Tim Solso said in a statement today that the board of directors will create a stand-alone committee to oversee “risk-management” issues. He also said the report concluded that Barra, Ammann and global product-development chief Mark Reuss did not learn of the ignition switch matter until December, shortly before the decision was made to issue a recall.

During a meeting with GM employees that was broadcast online, Barra called Valukas’ report “extremely thorough, brutally tough and deeply troubling.” She said engineers and others who learned of problems with ignition switches as early as 2003 “misdiagnosed the problem from the very beginning” and failed to treat it with the appropriate level of urgency.

Barra did not identify the employees who were fired or resigned. Two engineers who had been suspended with pay since April 10 — Ray DeGiorgio, who designed the ignition switch, and Gary Altman, the program engineering manager for the Chevrolet Cobalt — are among them, people familiar with the matter told Automotive News. Neither DeGiorgio nor Altman have commented publicly on their situations.

Barra said most or all of the dismissed employees worked in the engineering, legal, public policy and quality departments and that more than half were senior-level executives. Five additional employees have been disciplined, she said.

“From start to finish, the Cobalt saga was riddled with failure, which led to tragic results for many,” Barra said.

More hearings

Leaders of the House and Senate committees that have been investigating the recall each said they plan to review the Valukas report hold follow-up hearings in the coming months.

“I won’t be letting GM leadership, or federal regulators, escape accountability for these tragedies,” Sen. Claire McCaskill, D-Mo., said in a statement. “That’s why I’ll be holding a follow-up hearing later this summer to address unanswered questions. The families of those affected deserve no less.”

Barra said GM dealers have gotten 280,000 repair kits and repaired 113,000 cars. The company expects to meet its target of having enough parts to repair all affected cars by October.

Barra said the report makes 90 recommendations for actions that GM should take in eight major areas, without giving specifics. She said the company would act on “all of these recommendations” and has already taken steps toward implementing some of them.

She said GM is continuing to review pending safety issues and expects its flurry of recalls, covering a total of 15.8 million vehicles this year so far, to be “substantially complete” by the end of June.

GM’s general counsel, Mike Millikin, who helped lead the investigation, is staying with the automaker, Barra said.

GM says it has linked 13 deaths and 47 crashes to the defective switches. Lawyers and safety advocates contend that the death and injury toll is far higher.

Paying fine

GM in May admitted breaking federal law and agreed to pay a $35 million fine levied by NHTSA. It also has to meet with NHTSA officials monthly to discuss potential safety issues and implementation of the changes recommended by Valukas’ report.

Bob Lutz, the former GM vice chairman who headed product development, said last night during a dinner event at Eastern Michigan University that high turnover and lack of communication in the company caused the faulty ignition switches to go unnoticed.

Lutz said each department in the company knew small aspects of the problem, but employees never came together to look at the big picture.

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Posted on May 27, 2014February 20, 2019

Teslas Begin Entering the Used Market

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Teslas Begin Entering the Used Market

10 years ago

ATLANTA –

With the help of a hefty loan from the Department of Energy in 2009, Tesla Motors has survived infancy, and is becoming more and more popular, as it expands its lineup and plans to offer a more affordable option for consumers in the near future.

The company has now been around long enough to start making a splash on the remarketing side of the industry, though the amount of Teslas entering the used market remains low.

For example, earlier this month, online auto retailer Carvana announced that what it’s calling the first Carvana certified pre-owned Tesla is now available on its website.

And Tesla postings on AutoTrader.com are showing significant boosts in shopper interest this spring. Auto Remarketing gained some insight into how these used vehicles are performing on the site from Mark Strand, industry intelligence manager at AutoTrader.com.

If you don’t think Tesla is making waves among car shoppers, check out this statistic.

Last month, Tesla models showed 929 percent more interest per listing than other vehicles in their competitive set on AutoTrader.com.

That said, “As the number of listings for used Tesla models on our site increases, the interest level will naturally become more consistent with other vehicles in the competitive set,” Strand added.

With that in mind, due to the increasing number of Tesla listings, AutoTrader is seeing a decline in the number of views per listing, he explained.

“However, this does not mean that interest is necessarily waning. As of right now, people interested in searching for used Teslas have fewer listings to view, so the percent of views per listing is naturally higher,” he said. “As more listings are posted on the site by dealers and private sellers, the percentage of views per listing will normalize.”

Interest in the luxury vehicles is still growing, though, and AutoTrader anticipated the difference in interest per listing to remain high for the foreseeable future.

And though the Tesla units still account for less than 1 percent of their competitive group on the site, the number of used Teslas listed on AutoTrader.com has grown by 820 percent.

But since the pre-owned market penetration remains low, Strand says, “They are unlikely to have a significant impact on the used market at their current level, and it will likely be several years before that could change.”

But there is no denying the number of used Teslas entering the market is growing. And this brings up the following question: Will dealers seek them out for their lots?

This poses an interesting point as franchised and independent dealers alike have been rallying against the automaker in opposition to its direct-to-consumer sales model, with lawsuits popping up all over the country in early 2014.

Stand says this shouldn’t have any impact on whether dealers intend to sell used Teslas.

“I think dealers will be able to keep any feelings around the Tesla direct sales model separate when looking at the profit opportunity a used Tesla could present. If the opportunities are there, I think dealers will be open to them, especially independent dealers who specialize in high-end luxury and exotics,” said Strand.

But it is too early to know much about Tesla retention rates and whether they will prove to be a good investment for dealers’ used departments.

“It’s early to draw definitive conclusions at this point. However, given the restrained supply and rave reviews the car gets, dealing in a good quality used Tesla seems like a solid opportunity for a dealer who is experienced in handling exotics and high end niche vehicles,” Strand said.

Market trends such as supply and demand are at work here, too. “In the short term, limited supply should keep used values on Teslas relatively high,” Strand said.

“But further down the road, as production capacity expands and the buzz dies down, I would expect used Teslas to lose some of their premium. From the consumer perspective, if someone is in the market for a Tesla, I don’t think he or she will be focused foremost on value retention and investment, as that person likely has some cash to burn,” he continued. “Even with strong value retention in the short term, we don’t know enough about how these cars age to know what the investment/depreciation will look like five to 10 years out, with high mileage or when the batteries near end of life.”

Much is still unknown about Tesla’s potential impact on the used-car industry, but the numbers are growing at a rapid pace — only time will tell what long-term effects the automaker will have on the EV and remarketing industries.

– See more at: http://www.autoremarketing.com/retail/teslas-begin-entering-the-used-market?utm_source=Listrak&utm_medium=Email&utm_term=http%3a%2f%2fwww.autoremarketing.com%2fretail%2fteslas-begin-entering-the-used-market&utm_campaign=Pre-Owned+Teslas+Make+a+Splash+#sthash.2OlZaqZ0.dpuf

ATLANTA – With the help of a hefty loan from the Department of Energy in 2009, Tesla Motors has survived infancy, and is becoming more and more popular, as it expands its lineup and plans to offer a more affordable option for consumers in the near future.