General Motors Co. continues to make headlines as Chief Executive Officer Mary Barra deals with the aftermath of recalls and public relations crises. Last week, two top employees were suspended, while Tuesday there were several more follow-up stories about what’s going on at the automaker.
Jeff Bennett wrote for the Wall Street Journal that GM is trying to increase safety standards:
General Motors Co. Chief Executive Mary Barra sought to shift the focus on Tuesday to the auto maker’s coming new vehicles and away from investigations of a troubled ignition-switch recall, but struggled amid a barrage of questions about its responses to the probes.
In New York ahead of an auto show, Ms. Barra deflected questions about a potential U.S. criminal probe, saying she wasn’t aware if the Department of Justice has sought documents from the company, and declined to say when GM expected to answer all questions posed by auto-safety regulator National Highway Traffic Safety Administration.
“We are working on those every day,” she said of the NHTSA inquiry while surrounded by a media crowd peppering her with questions. GM Global Product Chief Mark Reuss was recruited to help provide crowd control after her speech.
GM said it is forming a product integrity organization under Mr. Reuss that will include a newly named vehicle safety czar. GM named engineering veteran Jeff Boyer as vice president of global vehicle safety and charged him with handling all safety-related issues including recalls. His group will be moved into the new organization. Mr. Reuss declined to provide more details on how the group will work but did say he will make additions to the team in the coming days.
Writing for the Detroit Free Press, Nathan Bomey reported that Barra was also cleaning up the company’s leadership in the wake of the recalls:
Two members of General Motors’ senior leadership team are leaving the company three months after a transition to a new CEO and amid a crisis over the automaker’s failure to fix an ignition switch defect.
Selim Bingol, senior vice president of public policy and communications, and Melissa Howell, senior vice president for human resources, will “pursue other interests,” GM said in a statement.
A company spokesman, Greg Martin, said the departures were not connected to the recall of 2.6 million small cars from 2003 through 2010 for defective ignition switches. The ignition switch defect is tied to at least 31 crashes and 13 deaths in Chevrolet Cobalts and Saturn Ions.
Bingol, has led GM’s public relations team since 2010 when he was tapped by former CEO Ed Whitacre. His successor will be named later.
Howell, who had been in the top HR job since February 2013, joined the automaker in 1990.
The New York Times had a story by Alexandra Stevenson pointing out that GM still had some (or one) willing to defend the company:
General Motors has come up against a tide of criticism. Its chief executive has been grilled by lawmakers for creating a “culture of cover-up,” it has been fined, and it faces investigations by a Senate panel and regulators over when it knew about serious safety issues.
But there is at least one person outside the company who is willing to step forward to defend G.M.: J. Kyle Bass, the hedge fund manager who made a name for himself betting against subprime mortgages.
He is now betting on G.M., which is under political scrutiny for a decade-long delay in dealing with a defect tied to 13 deaths.
“The question is why isn’t anyone defending General Motors, and I think neither side of the aisle can gain political capital by defending them,” Mr. Bass said in an interview. “They’ve been indicted in the public court of opinion. If you’re talking about true legal liability, it is de minimis.”
Mr. Bass’s $2 billion hedge fund, Hayman Capital, owns eight million shares of G.M., according to a person close to the firm. It is a stake that is small relative to the size of the $51 billion company, but it is the fund’s single biggest holding.
James Detar wrote for Investor’s Business Daily that GM workers stood in the way of an internal inquiry into the faulty ignition switch:
General Motors (GM) came under fresh scrutiny as a report analyzing documents released last week indicated that co-workers apparently blocked an in-house investigation into a faulty ignition switch linked to 13 deaths.
GM shares, which had fallen 30% from a Dec. 26 high to last Friday, rose as much as 3% early Monday. Some analysts have said that the strong auto market in the U.S. and China could offset losses associated with recent recalls.
In a report released Monday based on GM internal emails released by the company last week, Bloomberg found that engineer Brian Stouffer began trying in summer 2011 to determine why some ignition switches caused cars to stall, resulting in accidents. But upper-level managers reassigned him three times in a year, hampering his investigation.
As the story continues to unfold, I’m reminded of something that one of the smartest public relations executives once told me. The gist of the advice was that once a company uncovers something that’s gone wrong, the best way to deal with it is all at once and upfront. It might be painful to air all the dirty laundry at once, but it does prevent the days and days of front-page and bold website headlines as stories unfold slowly. Once the original story is broken, it’s most likely to all come out.
