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Originally published April 15, 2014 at 7:49 PM | Page modified April 16, 2014 at 11:46 AM

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GM crisis ‘catalyst for change’ in company’s culture, CEO says

In her first public appearance since enduring withering criticism at congressional hearings two weeks ago, Barra reassured an audience of auto executives and dealers that GM will use the controversial ignition recall to become a better company.

The New York Times


General Motors CEO Mary Barra reiterated her vow Tuesday to root out the cause of the long delay in the recall of defective cars, and to make sure that safety defects are never again buried in the automaker’s bureaucracy.

In her first public appearance since enduring withering criticism at congressional hearings two weeks ago, Barra told an audience of auto executives and dealers that GM was delivering parts and starting to fix the 2.6 million small cars it has recalled for faulty ignition switches that it has linked to 13 deaths.

“I am confident the team will learn from this recall, and GM will become a better company because of it,” Barra said.

The speech, sponsored by the National Automobile Dealers Association, received a much friendlier reception than her remarks before lawmakers earlier this month, when she was grilled over why GM failed to fix a deadly safety problem it knew about for more than a decade.

While she did not repeat the apologies for the crisis she had made to Congress, Barra promised to overhaul GM’s culture and operations so safety problems come to light sooner and are addressed quickly.

“We will use this as a catalyst for change,” she said, adding that she had not anticipated facing a crisis of this magnitude in her first months as chief executive.

Barra used the speech to announce another safety initiative, a “global product integrity” organization that includes all the executives involved in developing new models. The group will include executives like Mark Reuss, the head of worldwide product development, and Jeff Boyer, the GM’s recently appointed vice president for vehicle safety.

Last week, she created a new system that encourages rank-and-file employees to report possible safety problems to senior management.

“Our goal is to ensure the highest safety and execution of any vehicle we introduce across the globe,” Barra said, adding that the new organization “will ensure a situation like the ignition-switch recall never happens again.”

Dealers in the audience punctuated Barra’s speech with applause and shared her urgency in getting the cars fixed.

Brian Hamilton, who runs two dealerships in Nebraska, said his mechanics had started making repairs Monday and had completed about five. The dealerships, he said, have 40 more cars on the ground waiting, and an additional 80 ready to come in once the parts arrive.

“We’re waiting for parts, like everyone,” he said, adding that the dealerships would start opening on Sundays beginning in May to complete the repairs. The expense of being open Sunday will be reimbursed by GM, which recently raised the cost for the ignition-switch recall and other subsequent recalls to $1.3 billion in the first quarter.

Stephen Wade, president of Utah-based Stephen Wade Automotive Group, which runs more than a dozen dealerships, did not seem concerned about waning customer interest.

“This kind of a thing could have been a death knell when ... GM products were terrible,” Wade said. But he added that GM cars had vastly improved.

“Would I put my mother in a GM product? Would I put my daughter in a GM car? All day long,” Wade said.

And Tim Jackson, chief executive of the Colorado Automobile Dealers Association, said the first replacement parts had begun arriving in the state Friday. “The repair process is under way.”

Dealers, he said, “are ready to resolve this issue and get it behind the consumer and behind them,” he said.

During a question-and-answer session after the speech, Barra declined to offer an explanation for the protracted delays in starting a recall — despite evidence that GM knew of ignition problems in its small cars as early as 2001.

“When we realized it, we brought it forward,” she said, referring to findings by an internal safety committee that recommended a recall be started Jan. 31.

She said it was “the right thing” to suspend two engineers who, according to documents filed with regulators, were aware of the switch problems for years.

But Barra declined to characterize what the engineers did wrong, or whether more employees would be suspended as the company continued its internal investigation of the switch issues.

Even if her speech helped reassure dealers and auto executives, lawmakers’ interest remained high in understanding more about GM’s failure to fix the ignition switch

The Senate Commerce Committee on Tuesday demanded extensive documents from the supplier that manufactured the switch, Delphi Automotive.

The committee is also seeking to determine why the ignition switch was changed in 2006 but its part number was not — a source of confusion for engineers trying to understand the defect.

“Rather than relying only on GM’s version of events, we believe that consumers throughout the United States should hear directly from you,” said the letter to Delphi, which also asked for a briefing from company officials.

The letter was signed by Senate Democrats Jay Rockefeller of West Virginia, chairman of the full committee; and Claire McCaskill of Missouri, chairwoman of the subcommittee on consumer protection; and by the ranking Republican members of both committees, John Thune of South Dakota and Dean Heller of Nevada.

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