By Jeff Bennett and Katy Stech
General Motors Co.'s global head of engineering is leaving the
company and his duties are being split amid new fallout from the
auto maker's recall of 2.6 million vehicles with faulty ignition
switches and an internal probe.
John Calabrese, vice president of global vehicle engineering, is
retiring after more than 33 years with the nation's largest auto
maker, the company said on Tuesday. His organization is being
divided to provide more clarity and accountability, said Mark
Reuss, GM's executive vice president of global product
development.
The new organizations are global product integrity and global
vehicle components and subsystems. Ken Morris, 47, was named vice
president of the integrity group, which was formed last week and is
responsible for preventing safety issues during vehicle
development. Ken Kelzer, 51, vice president of GM Europe powertrain
engineering, will take over the group developing vehicle components
and subsystems.
As part of the reorganization, GM said it would more than double
to 55 a team of safety investigators working within engineering,
and would require its legal department to regularly brief
engineering on legal complaints involving its vehicles.
The Detroit company is revamping how it operates in the wake of
recent disclosures that some engineering managers ruled out repairs
as too expensive or took no actions despite years of complaints
about some small cars stalling, and that its legal and product
groups never discussed lawsuits and customer vehicle problems.
GM, the U.S. auto safety regulator and a U.S. attorney
separately are looking at why it took the company nearly a decade
to recall cars with faulty ignition switches that have been linked
to accidents that caused 13 deaths. GM has said it would take
action based on information that its internal investigation
uncovers. That probe is expected to be completed in late May or
early June.
Mr. Calabrese, 55, who took part in Tuesday's announcement and
helped design the organizational changes, didn't respond to
questions about his departure, which Mr. Reuss said is unrelated to
the ignition-switch recall.
Mr. Calabrese was appointed to his global role in 2011. At that
same time, an internal investigative team was probing within the
engineering department complaints involving the faulty ignition
switch. That effort was led by GM engineering executive Jim
Federico, who oversaw all its compact vehicles, according to court
documents from a lawsuit involving a failure switch.
Court records from a lawsuit deposition show that Mr. Federico
served on the team for about a year but it unknown if he reported
the situation to his superiors, which at the time would have
included Mr. Calabrese.
When first asked about Mr. Calabrese in March, Chief Executive
Mary Barra said she had confidence in him and in the vehicle
engineering organization. "We are doing an investigation and we
will go where the facts take us," Ms. Barra then said.
Since the internal investigation began in March, Ms. Barra has
suspended two engineers with pay; changed the leadership of the
human resources department; announced the departure of her
communications chief and moved Cadillac chief Bob Ferguson back to
his former role of vice president of public policy serving on
Capitol Hill.
"It's not that we didn't move fast enough on different recalls,
it is that we had different variations of the process," Mr. Reuss
said on Tuesday. He insisted the engineering changes came from a
recall-prompted review of "how the organization should be
restructured."
Mr. Reuss was responding to documents released earlier this
month showing GM was slow not only to act on the faulty ignition
switch but other issues such as problems with electronic steering
in the Saturn Ion. An email shows Ms. Barra, then head of product
development, was told in 2011 of the steering issue. The cars
weren't recalled until March.
"The general perception is that GM is slow to communicate, slow
to act," Frank Borris, head of the U.S. National Highway Traffic
Safety Administration's Office of Defect Investigation wrote in a
note to GM's director of product investigations in July 2013,
complaining of the auto maker's inconsistency and lack of
coordination on several unrelated recall investigations.
GM is being fined $7,000 a day for failing to meet NHTSA's
request to answer 107 questions related to the chronology of events
the auto maker submitted to explain the recall delay. GM was to
answer all questions by April 3 meaning it has accumulated $126,000
in fines as of Monday.
When asked if the engineering shake up would end the development
group changes, Mr. Reuss said there is still more to come.
Meanwhile, in a lawsuit filed Monday in U.S. Bankruptcy Court in
New York, lawyers who represent victims' families argued that the
auto maker is wrongly hiding behind a U.S. Bankruptcy Court
decision that allowed it to shift legal claims by a host of
car-accident victims to a separate entity, referred to as "old
GM."
The U.S. government orchestrated a Chapter 11 bankruptcy sale,
which created a "new" company, now known as General Motors LLC,
while leaving behind the remnants of the "old" GM in bankruptcy. In
Monday's lawsuit they said General Motors "did not disclose [the
problem's] existence to the Bankruptcy Court" during its quick
sale.
A spokesman for General Motors declined to comment on the
lawsuit.
Lawyers for victims have already filed several class-action
lawsuits over the ignition switches in courts around the country,
including California, Illinois and Michigan. The new GM wants the
judge to bar accident victims from suing the new company over the
ignition-switch defects, claiming his 2009 sale order left those
liabilities with the remnants of GM left behind in bankruptcy.
Both lawyers for General Motors LLC, the operating company that
emerged from bankruptcy restructuring, and lawyers for some of the
victims have asked U.S. Bankruptcy Judge Robert E. Gerber to rule
on the issue. When Judge Gerber signed the sale order in July 2009,
he retained "exclusive jurisdiction" to interpret his decision.
Jacqueline Palank and Patrick Fitzgerald contributed to this
article.
Write to Jeff Bennett at jeff.bennett@wsj.com and Katy Stech at
katherine.stech@wsj.com
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