GM's original whistleblower speaks out NEW YORK (CNNMoney) A corporate culture that stopped acknowledging problems is why General Motors is in its current predicament, according to a former quality manager for the automaker. In an exclusive interview that aired Saturday on CNN's "Smerconish," former GM manager Bill McAleer told host Michael Smerconish that employees who work at GM were "faced with a culture where you get fired if you do talk about quality and safety issues, and you get fired if you don't talk about them."
GM (GM) is dealing with a backlash for delaying the recall of 2.6 million vehicles for an ignition switch defect that's been tied to at least 13 deaths. Some GM employees knew the part was causing trouble more than a decade before the recall was issued in February.
McAleer, who started on the assembly line in 1968, says he was in charge of the Global Delivery Survey from 1988 to 1998 that GM used to help assess the quality of its cars before they were delivered to dealers.
He says he found a "wide variety" of what he called "catastrophic defects" beginning in 1995, when GM added a routine obstacle course drive to its quality checklist. Problems ranged from gasoline leaks to steering linkage issues that pointed to overall quality defects.
McAleer said that while the company seemed responsive to fixing problems in the mid '90's, that changed.
Lawmakers grill GM's Barra in D.C. "In 1997 something happened internally in GM where no problem could be admitted. Whether it was safety or any kind of problem. We couldn't have a problem," he said.
"That's what happened with the ignition switch," he added. "People knew there was a problem, but problems were not acceptable. They just ignored it."
McAleer eventually was laid off from GM in 2004. He tried to sue the company under a whistleblower law but said he was unsuccessful.
McAleer said he sent a letter to the GM board of directors to tell them about the overall quality problems and the lack of action by management, but he thinks that the letter might have been intentionally misdirected once it got there.
GM issued a statement saying,"If McAleer's concerns were submitted by an employee today, they would be thoroughly investigated within the safety organization! , however that is not to imply that in this particular case, his issues weren't."
The company also said that while McAleer lost his case against GM, it will still look at his allegations to see what "we can learn."
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Tony Dejak/AP WASHINGTON -- Sales of new U.S. single-family homes fell more than expected and hit a five-month low in February, pointing to continued weakness in the housing market. The Commerce Department said Tuesday that sales fell 3.3 percent to a seasonally adjusted annual rate of 440,000 units, the lowest level since last September. January's sales were revised down to a 455,000-unit pace from the previously reported 468,000-unit rate. Economists polled by Reuters had forecast new home sales at a 445,000-unit pace in February. New home sales fell 1.1 percent compared with February 2013. Last month's drop brought new home sales in line with other data such as home resales and building activity that have offered a downbeat picture of the housing market. Some of the housing slowdown has been blamed on an unusually cold and snowy winter. But the sector, the main channel through which the Federal Reserve has sought to stimulate the economy via monthly bond purchases, lost momentum last summer following a run-up in mortgage rates. A dwindling supply of homes for sale and soaring house prices have also weighed. But a recovery is expected later this year as household formation accelerates after abruptly slowing in 2013. Last month, sales in the Northeast tumbled 32.4 percent, the biggest decline since October 2012, indicating severe weather continued to hurt activity. Sales fell 1.5 percent in the South, which experienced harsh weather. They surged 36.7 percent in the Midwest, but fell 15.9 percent in the West. Though the supply of new houses on the market hit the highest level since December 2010, inventory remains low. At February's sales pace it would take 5.2 months to clear the supply of houses on the market. That was up from 5 months in January and the most since last September. A supply of 6 months is normally considered a healthy balance between supply and demand. The median price of a new home last month fell 1.2 percent from February 2013. It was the biggest drop since June 2012.
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Jim R. Bounds/Bloomberg via Getty Images DETROIT -- Ignition switches once again are causing problems for General Motors. This time the company is recalling nearly 512,000 Chevrolet Camaro muscle cars from the 2010 to 2014 model years because a driver's knee can bump the key and knock the switch out of the "run" position, causing an engine stall. That disables the power steering and brakes and could cause drivers to lose control. GM (GM) said Friday that it knows of three crashes and four minor injuries from the problem. A spokesman said the air bags didn't go off in the crashes, but GM hasn't determined if the nondeployment was caused by the switches. GM said the Camaro switches met its specifications -- unlike those at the center of a recall of 2.6 million small cars. That problem has caused more than 50 crashes and at least 13 deaths. Company spokesman Alan Adler said the problem occurs rarely and affects mainly drivers who are tall and sit close to the steering column so their knees can come in contact with the key. The Camaro switches are completely different from those in the small cars with ignition switch problems. The Camaro switches, he said, were designed by a different person, and meet GM standards for the amount of force needed to turn the cars on and off. Currently the Camaro key is concealed in the fob like a switchblade. GM will replace it with a standard key, and a separate fob attached by a ring so it will dangle from the key. Adler said with the change, if the driver's knee hits the fob, it doesn't come in contact with the key. "You can hit the key fob all day long and it's not going to have any impact on the ignition," he said. The problem was discovered during internal testing of ignition switches after the company recalled the switches in small cars such as the Chevrolet Cobalt and Saturn Ion earlier this year, GM said. GM knew for more than a decade that the small-car switches were faulty, yet didn't recall them until early this year. The problem has brought federal investigations, lawsuits and a $35 million fine from the National Highway Traffic Safety Administration. GM also announced three other recalls Friday, bringing the total number of vehicles recalled by the company to about 14.4 million in the U.S. and 16.5 million in North America. Earlier this year GM passed its old U.S. full-year recall record of 10.75 million vehicles set in 2004.
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