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GM recall an early trial for its new CEO

by BILL VLASIC New York Times News Service on March 09, 2014 1:19 AM

DETROIT — Only weeks into her tenure as chief executive of General Motors, Mary T. Barra has been increasingly consumed by a crisis over the sweeping recall of 1.6 million defective cars linked to 13 deaths.

Barra, a trained engineer and an employee at GM for more than 30 years, learned of the defect on Jan. 31 — the first time, the company said, that any senior executive had been told of the problem since it surfaced more than a decade ago.

She has remained publicly silent on the issue and has declined all requests for interviews. Officials at the company, however, say she has taken the lead role in handling the crisis. At her direction, the company says, several of GM’s most senior executives have been delegated to oversee parts of the recall. She has also ordered a rare public apology and started an internal inquiry to determine why GM spent years studying a deadly safety issue without taking action.

Still, Barra is facing tough questions about her credibility and leadership. On Wednesday, the National Highway Traffic Safety Administration ordered GM to answer 107 detailed questions about events leading up to the recalls.

“The public demands answers from Mary as the chief executive,” said Eric Schiffer, chairman of the firm Reputation Management Consultants. “Her credibility is on the line.”

GM’s chief spokesman, Selim Bingol, said Friday that Barra was devoting her efforts to managing the recall, which was expected to get underway next month. The first recall letters to registered owners were sent Friday, the company said.

“Mary believes that her time is best spent on making the recall work as smoothly as possible for our customers,” Bingol said. “Meanwhile, GM is keeping our customers informed about the recall while working to provide timely responses to questions from regulators.”

For any chief executive, the phone call Barra received at the end of January would have been troubling. A three-person committee at GM that oversees safety issues said faulty ignition switches had been tied to several fatal accidents in the company’s Chevrolet Cobalt and Pontiac G5 sedans — and the committee was recommending a huge recall.

Perhaps most disturbing was that GM officials had known for a decade that the switches could fail and cut off engine power and electrical systems in the cars, disabling their air bags and leaving occupants vulnerable to serious injury and death.

But since that call, a picture emerges in interviews with company officials of an automaker grappling with a crisis on a day-to-day basis, with an untested chief executive.

After receiving the call from the safety committee, Barra quickly convened a group of top executives to commandeer the recall efforts, according to people with direct knowledge of the events who were not authorized to speak publicly.

According to a chronology of events the company submitted to the government, GM officials were aware as far back as 2004 that keys in ignitions could inadvertently be jostled and cause engines to shut off, deactivating air bags. The chronology also shows that unnamed employees at the company knew at various times of frontal-impact crashes linked to ignition failures.

One participant in the recall strategy sessions with Barra said she stressed the importance of an aggressive internal inquiry.

“I want a comprehensive, unvarnished review of this situation,” she told the group. “We will go where the facts take us.”

Lawyers investigating the company interviewed a number of employees this week. People briefed on the investigation compared it to an internal inquiry of employees in GM’s operations in India last summer, when several executives were forced to leave the company for manipulating engine performance during government emissions testing.

Beyond executing a successful recall, Barra has pledged to make changes at GM to prevent a recurrence of the ignition-switch episode.

That will most likely include broad revisions in how potential safety issues are handled within the company. Critics have suggested, for instance, that excessive layers of bureaucracy may have kept the ignition problems from coming to the attention of senior management sooner.

The “executive field action decision” committee that ultimately informed Barra on Jan. 31, for example, made the call only after multiple meetings with another committee responsible for “field performance evaluation review.”

Some critics of GM openly wonder whether Barra herself had any knowledge of the ignition problems before the recall, particularly because she was a senior manufacturing executive when the Cobalt and other affected vehicles were built.

“If she had the title of global manufacturing engineering, what was her personal responsibility to know about this?” asked Schiffer, the management consultant.

But according to GM, top leaders were insulated from many of the company’s inner workings, including active safety reviews.

Robert Lutz was vice chairman of global product development during much of the time that lower-level engineers were studying the Cobalt problems. In an email interview Thursday, Lutz was asked if he had ever been informed of any potential defect in the car’s ignition system.

His one-word answer: “Never.”

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