Imagine you’re the new CEO of an automaker whose recently recalled millions of vehicles, some fitted with a potentially faulty ignition switch that inadvertently shuts off engines, stops power steering and disables airbags, have, by your count, killed 13, mostly young, people so far. A victims’ lawyer, suing your company, publicly requests you meet some of them. Do you go?
To General Motors chief Mary Barra’s immense credit, she showed up to a meeting that can’t have been easy. So far, the reports we’ve seen have been favourable, the victims’ families appreciative of what they regarded as a sincere apology.
Go deeper with GlobalData
Barra, whose early tenure at the top of the GM tree can only be described as a baptism of fire, has two things going for her in this ignition switch recall drama – she’s reportedly a mom, so can identify with the grieving parents who’ve lost a child in a car they trusted GM to make safe, and she’s an engineer so must have an understanding of the internal processes that led to a rather bizarre chain of events that appears to have seen the automaker approve a component that didn’t meet specs, take years to fix it, and lose track of which components were original and which were modified in the replacement parts supply chain. Hence the most recent expansion of the recall to include vehicles that may have been repaired using an unmodified switch.
All too often, companies faced with embarrassing issues try and ride the crisis out, fudge the issue, not face up to the truth. Inevitably the truth comes out, the layers of lawyers and PRs are exposed as liars, reputation suffers. Barra’s approach has been to admit to the problem, admit she doesn’t know all the answers, admit GM will learn from the events. There’s been no washing of hands with ‘not on my watch’ or ‘blame old GM; I head new GM’ types of dismissal.
Her testimony to the House Committee on Energy and Commerce Subcommittee on Oversight and Investigations on Capitol Hill today is going to be refreshingly frank.
She’ll say: “Sitting here today, I cannot tell you why it took years for a safety defect to be announced in that programme, but I can tell you that we will find out.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“When we have answers, we will be fully transparent with you, with our regulators, and with our customers.
“As soon as l learned about the problem, we acted without hesitation. We told the world we had a problem that needed to be fixed. We did so because whatever mistakes were made in the past, we will not shirk from our responsibilities now and in the future. Today’s GM will do the right thing.
“That begins with my sincere apologies to everyone who has been affected by this recall… especially to the families and friends of those who lost their lives or were injured. I am deeply sorry.
“I’ve asked former US Attorney Anton Valukas to conduct a thorough and unimpeded investigation of the actions of General Motors. He has free rein to go where the facts take him, regardless of the outcome. The facts will be the facts. Once they are in, my management team and I will use his findings to help assure this does not happen again. We will hold ourselves fully accountable.
“I’ve named a new vice president for global vehicle safety, Jeff Boyer. This is a first for GM. Jeff’s first priority is to quickly identify and resolve any and all product safety issues. He is not taking on this task alone. I stand with him. My senior management team stands with him. And we will welcome input from outside GM.”
This is a refreshing approach. ‘I’m the CEO now so I’m taking responsibility for the events of the past’.
It’s hard not to wish Barra the best for what is going to be a very trying time. Already bottom line hits for recall costs are being booked. Lawsuits will follow. As, likely, thanks to the Toyota ‘acceleration’ precedent, will NHTSA fines related to timeliness of recall notifications. It will be messy.
Barra and GM are unlikely to have to shoulder all the blame, though. The role of NHTSA and its identification of notified fault and recall trends will come under close scrutiny on the Hill, too.
Changes will be made. The faulty cars will eventually be fixed. GM’s future reputation and sales will depend, to some extent on how the public perceives the automaker’s approach to this recall. And Barra appears to be doing her best to deal with it all, with genuine sincerity.
