October 17, 2014 / 4:53 PM / 3 years ago

GM's top lawyer, hammered during recall hearing in Congress, to retire

A worker walks behind a logo of General Motors after the announcement of the closing of the Opel assembly plant in Antwerp January 21, 2010.Francois Lenoir/Files

DETROIT (Reuters) - General Motors Co's (GM.N) top lawyer will retire early next year, months after his department was heavily criticized for how it handled the automaker's defective ignition switch that has been linked to at least 27 deaths.

Michael Millikin, 66, informed GM of his decision, and the company will immediately begin an external search for his replacement, the No. 1 U.S. automaker said on Friday. He will remain general counsel, a position he has held since 2009, until a successor is named.

GM has faced criticism this year for waiting 11 years to recall millions of cars with ignition-switch problems that were linked to fatalities.

The switch can slip out of position, stalling the vehicle and disabling air bags, and the defect led to the recall of 2.6 million vehicles earlier this year.

GM declined to make Millikin available to comment, and he could not be reached.

One critic believed Milliken may have been pressured by the company to retire.

"Millikin is under the microscope for his failures and his allowing GM to face potential criminal prosecution as a result of the ignition switch cover-up," said Robert Hilliard, a lead attorney for plaintiffs suing GM over the faulty switch.

"Certainly GM doesn’t think that anyone believes this a really a voluntary ‘retirement,’" he said. "It is an attempt by GM to distance itself from a potential target of a criminal probe."

GM spokesman Patrick Morrissey said Millikin was not forced out, and, in the past, had even been asked to stay on longer by Chief Executive Officer Mary Barra and the board. He declined to comment on any criminal investigation.

State and federal prosecutors are investigating GM for issues related to the faulty switch.

It is not clear whether prosecutors are developing any cases against individuals, as their main focus has been on building a straightforward mail and wire fraud case against GM, sources said in June.

As part of their attempt to build a case against the company, sources said in August that prosecutors are looking at whether lawyers who attended key meetings about GM’s switch problems acted appropriately after the meetings or whether they mishandled information discussed.

Millikin's legal department came in for heavy criticism in a 325-page report released by GM in June. Many of the 15 people either fired or forced out by GM were attorneys or worked under Millikin. However, the report said Millikin did not know details of the ignition switch problem until this year.

GM said in March the internal investigation into the circumstances relating to the ignition-switch recall would be led by Anton Valukas, chairman of Chicago-based law firm Jenner & Block. Millikin was named co-leader of that investigation.

Questions were raised at the time about the law firm's relationship with the automaker. GM has worked with Jenner & Block since 2002, and at least two of the automaker's former top attorneys were partners at the Chicago law firm.

When Barra and Millikin were questioned at a U.S. Senate hearing in mid-July, lawmakers demanded to know why Millikin was not fired.

"I do not understand how the general counsel for a litigation department that had this massive failure of responsibility, how he would be allowed to continue in that important leadership role," Missouri Senator Claire McCaskill said then. She described the failure of GM's legal department as "stunning."

At that hearing, Barra defended Millikin as "a man of incredibly high integrity," an assessment she reiterated on Friday.

Connecticut Democratic Sen. Richard Blumenthal, who at the July hearing pushed for Millikin's exit, on Friday welcomed the change. "GM has an opportunity to bring in fresh leadership and sever another tie to the Old GM," he said in a statement.

Additional reporting by Jessica Dye and Emily Flitter in New York, Richard Cowan in Washington and Paul Lienert in Detroit; Editing by Bernadette Baum and Jonathan Oatis

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