By on April 4, 2014

Original 5 tower complex, John Portman, 1977

In an interview with New York Magazine, consumer advocate Ralph Nader said General Motors CEO Mary Barra has “a good opportunity” to make serious changes to the corporate cost culture that gave rise to the 2014 ignition recall crisis. Suggestions include appointing an independent ombudsman with a direct line to the president and CEO for engineers who need to speak out about possible problems without having to go through “cost-concerned bosses,” as well as holding accountable all involved in any cover-up of any potential product issues.

Nader also believes the federal government should go after personal prosecutions of those tied to the current recall, but adds that unless the media keeps putting the pressure on the Justice Department to do so, the only thing that could come is a settlement in the vein of the one reached between the agency and Toyota earlier this month.

As for where Barra was during the 14 years it took for the recall to surface, Forbes wove her 34-year-long résumé with General Motors into the recall timeline. In short: Barra would have been made aware of the ignition switch problem as early as 2011, when then-CEO Dan Akerson made her head of global product development, yet it was only in December of 2013 — when the torch was passed from Akerson to Barra — when the new CEO was presented with an analysis of the issue linked to the Chevrolet Cobalt; the recall decision would be presented to Barra by product development chief Mark Reuss at the end of January 2014.

Detroit Free Press reports the National Highway Traffic Safety Administration received 200,000 from GM in response to the 107-question survey aimed to drill down what had happened leading up to the recall, as explained in a statement issued by the automaker:

The company has submitted some 200,000 pages of documents and will provide today answers to nearly 65% of the questions. GM is cooperating fully with NHTSA and is keeping the agency apprised at every step of its progress as it works to respond to the remaining questions within the Special Order.

The agency will release the documents upon vetting, a process that could take weeks to accomplish.

Meanwhile, Bloomberg reports the task force appointed by the Obama Administration to manage GM’s bankruptcy proceedings were not made aware of the out-of-spec ignition and subsequent reports linked to its failure. The task force spent more time focusing on what brands needed to be cut and how pensions and health care would be handled, with then-current product-liability claims — totaling $414 million pre-bankruptcy — given a broad look without looking ahead toward future claims.

Within the Capitol, the nation’s lawmakers are considering higher fines and criminal liability in the wake of the two congressional hearings earlier this week. Senator Jay Rockerfeller of West Virginia plans to propose an update to the 2000 TREAD Act in the aim of giving the NHTSA more firepower to take automakers to task over failures to properly and quickly handle potential problems, while regulators would like to boost the agency’s fine limit from $35 million to $300 million.

Back in Detroit, GM has hired crisis-communications expert and former director of media affairs for the Clinton Administration Jeff Eller to join the growing team of experienced crisis managers — including Kenneth Feinberg and Anton Valukas — assembled to guide the automaker through the ongoing recall debacle. Eller worked on the Firestone-Ford crisis in 2000, and will have a number of GM’s allies inside the Beltway on his side.

GM’s partner in the maelstrom, Delphi, may emerge less unscathed if the supplier’s stronger bankruptcy protections hold according to Reuters. Unlike the automaker, Delphi did not assume successor liability during its 2009 bankruptcy proceedings, forcing lawyers to convince any judge who hears their cases that Delphi covered-up the design flaw, and thus, should force “New Delphi” into becoming liable.

Speaking of lawsuits, Bloomberg reports U.S. District Judge Nelva Gonzales Ramos in Corpus Christi, Texas is preparing to consider issuing an order to GM to instruct all affected consumers to park their vehicles until the flaw is fixed. The order is part of a class-action lawsuit filed by Robert Hilliard on behalf of Charles and Grace Silvas, seeking as much as $10 billion in lost resale value for the vehicles under the recall. The Detroit News adds Hilliard sent an email to Barra with evidence from an affidavit illustrating that even with the key stripped down to the bone, the switch will still shut the vehicle off, including the airbag system.

Finally, Reuters reports GM dealerships may have more than polar vortices to weather on the sales floor as a result of the recall. Dealers have reported fielding as many as 50 calls per day from concerned consumers over what to do with their affected vehicles, as well as offering more rental cars and taking in more trade-ins. Spokesman Jim Cain offered his view on the situation facing dealers:

Time will tell. In the long term, we will be judged on how we take care of customers. We have advertising incentives and other tools to use if there’s evidence that sales in the short term may be impacted. But we haven’t seen that.

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42 Comments on “GM Adds Clinton Media Director To Crisis Team...”


  • avatar
    28-Cars-Later

    Excellent well balanced article, Cameron.

  • avatar
    bomberpete

    So Reuss knew, which shouldn’t surprise anyone.

    • 0 avatar
      gtrslngr

      Oh heck . They all knew from day one . Just like they all knew they were setting up Mary Bara as the official GM Scapegoat . Everyone else jumping ship before the inevitable s**t hit the fan .

      But seriously . Hiring a former Clinton PR person to put a spin on this decades old mess GM is in ? Yeah . That’ll help . God forbid we should actually address the problem full on – make damn sure it never happens again .. take care of those directly affected . Nah … Do the GM Trance Dance . Put another spin on it all and hope it goes away for another decade or two . Yeah … that’ll work

      But to be fair people . Get used to this … and not just from GM . Between overly complicated cars .. more and more outsourcing on critical parts .. with more of them coming from countries with neither the experience technology or education to deal with them … compounded by Investors for whom the only well being they are concerned with is the well being of their back pockets ….

      What already happened to Toyota … as well as what is happening with GM presently . Will be the new normal when it comes to most if not all the auto manufactures out there . Remembering … you are NOT … a customer in the new corporate reality . You are a commodity to be bought sold and traded on a whim . And your’s and my well being is not even an after thought . Period !

      But in closing I will say this . Whats happening with GM now is what has been happening with GM from the company’s inception . And its only about to get even worse than it already is .

      • 0 avatar
        SCE to AUX

        You’re pretty much wrong on every point… again.

        “They all knew” – Sure, in a company of 200,000 people, the entire engineering staff, supply chain staff, and management staff knew that of all the people dying in GM’s cars every day, an incredibly small fraction were possibly in vehicles with defective switches. And they knew it the first time it happened, and all decided that it was better for their customers to die than to fix the problem. Gimme a break.

        And you do know that outsourcing of car parts has been going on successfully for decades, right? Or do you think we’re all driving time bombs greedily designed and built by shady companies?

        • 0 avatar
          CarPerson

          “And you do know that outsourcing of car parts has been going on successfully for decades, right?”

          Make that about a century.

          Henry assembled the Model T but who was it that made most of the parts? That would be none other than the Dodge brothers.

  • avatar
    thegamper

    So is this the stage in the crisis where they start making campaign contributions to certain congressinal members with a wink and a nod that those tough potentially embarrassing questions should fade away?

    I realize people died, but this still seems to be blown way out of proportion. Umm, how many people die from tobacco every year? Alcohol? Medical mistakes? OK..so there is the feet dragging thing and the coverup. GM isnt any different, GM got caught. But honestly, worse things happen all the time and congress doesnt devote 2 days of hearings to it, not to mention whatever is in the pipeline. How many days of hearings did congress have on gun control after Sandy Hook? You go ahead and pick a topic. This is grandstanding by congressional members becuase they have a villan who is getting lots of media coverage and its an election year. If I bang my fist loud enough and show how outraged people think I should be, maybe my constituents will notice.

    Congress should go back to handling important topics that really matter to the future of the counrty like gay marriage and steroid use in professional atheletics.

    • 0 avatar
      gtrslngr

      Hmmmn … so corporate ethics … safety … dishonest business men/women placing peoples lives in jeopardy in order to further corporate profits .. blatant lies and ignoring the problem to save a whole $.57 per unit .. isn’t the job of Congress ?

      Interesting . Which Congress you talking about ? Ours .. or some Despotic country with the pretense of a Congress ?

      I mean … sure … there’s worse/more important things they could/should be attending to [ but . yeah ... you go right ahead and try to take a stand against say the NRA ... as see how long you last ]

      But fact is . This IS pretty damn important as well . Unless of course you work or are invested in GM .. in which case … sure … you’d love to see Congress pay attention to ANYTHING other than this .

  • avatar
    APaGttH

    … The order is part of a class-action lawsuit filed by Robert Hilliard on behalf of Charles and Grace Silvas, seeking as much as $10 billion in lost resale value for the vehicles under the recall…

    You mean to tell me that a Saturn ION actually had resale value???

  • avatar
    SCE to AUX

    “personal prosecutions”

    1. We don’t even know if there was criminal wrongdoing by the company or its employees, and yet Ralph Nader has it all figured out.

    2. If you want to put a chill on the engineering profession, do this. And then don’t complain when companies decide to outsource even more of their engineering overseas.

    • 0 avatar
      APaGttH

      Exactly. Forget overseas, just jettison the engineers move them to staffing firms and pay them H2 pay rates.

      At least corporate interests are protected.

      If people aren’t keeping up with current events, corporations are people, money is free speech, and limiting campaign contributions is Unconstitutional.

      NO ONE will go to jail over this. Just as no one went to jail at Toyota. And lest we forget the 10 million plus Ford vehicles recalled for self-immolation from bad cruise control relays, and the documented house fires and injuries and fatalities they caused.

      Oh ya, no one went to jail for that little bit of oversight and slow trickling recalls either.

      This isn’t a defense for GM if you’re obtuse. It is a condemnation of the corporatism we live in. And what if by some miracle the system actually goes to seek justice – bankruptcy reorganization is your friend to making all your problems go away.

      Oh the playbook is very well written, worn out, and already used by many.

    • 0 avatar
      ktm

      I guess mechanical, electrical and chemical engineers are all pussies compared to a registered professional civil engineer. Do you know that a PE IS personally liable if they stamped and sealed a document? I think it is great that they are thinking about personal prosecutions. It happens in my field under the same tragic conditions.

      It amazes me that a car does not require that a professional engineer “sign-off” on aspects of its design, but I have to seal a drawing for a non critical design element like a drainage ditch.

      • 0 avatar
        Elena

        I feel your pain. I’m asked to produce drawings and wind resistance calculation tables to obtain structural permits to install 4 ft poles and a PE must certify they are able to withstand winds up to 160 MPH. It will be knocked down by a flying F-150, was all I said. Regardless, Building Department forced me to obtain such certification to close an electrical permit (a license plate camera was all the pole was holding). Funny unless you’re the one paying for it, but I understood the PE’s point: he is liable if it fails.

      • 0 avatar
        jetcal1

        Ktm, I have to sign off everything I touch on an airplane. Doesn’t matter if my vendor sold me a bad part or not. By law, once I install it, I am subject to both Federal prosecution and civil lawsuits. And DOL says I am only semi-skilled.

  • avatar
    Lorenzo

    I doubt that having an ombudsman so low level employees can go over the heads of their bosses is workable. That sounds like a good way to short-circuit a career.

    The Navy had hidebound leadership in the late 1960s and the civilian leadership response was to pull up a more innovative officer from the lower ranks. Admiral Zumwalt was elevated to Chief of Naval Operations over more than a dozen more senior officers, specifically to shake up the status quo, and major changes were made that others would not have implemented.

    Akerson tried that, but did it badly, putting people in charge who had no background in the areas they led. Maybe Barra will reach down into lower levels and elevate innovators tired of having their ideas shot down by those above, giving them the power to shake up departments and clear out the deadwood.

    • 0 avatar
      doctor olds

      GM has had something like the ombudsman that Nader calls for at least several decades! It is called the Awareline (at least was prior to my retirement in ’08). All employees are urged to report any wrong doing or anything else they feel is wrong. They can do so anonymously, if they choose. GM has had an “open door” policy for even longer, inviting employees to escalate any concern up their reporting chain to whatever level they choose.

      One thing for sure, Nader displays ignorance of how GM really is. Another self serving political hack, as a matter of fact.

  • avatar
    CJinSD

    https://autos.yahoo.com/blogs/motoramic/rusted–broken-brake-lines-in-gm-pickups-demonstrate-the-twilight-zones-of-auto-safety-203750980.html

    This is how business works under fascism. Hire the right people and accountability will be for someone less favored.

  • avatar
    CarPerson

    So far, to the best the horrible main steam media (MSM) is reporting, this is not a cover-up issue but the fact that too many had only single pieces of the puzzle.

    Ms. Barra has already instituted a structure to get all these people at the same table at the same time to get a much earlier picture of what is afoot.

    Instituting anything to discourage coverups will be totally ineffective as this is NOT at the core of what failed the company. GM, who shoveled sh!t out of their showrooms for over two decades, has this one nailed. Now comes the dreary task of getting those epically wrong in their current thinking to a place somewhat more attached to the reality of the flaw that occurred in the GM silos.

  • avatar
    Lou_BC

    A Clinton damage control expert?
    Does that mean Bara has an unwashed blouse stored in a drawer somewhere?

    I do think that this issue is being overblown (More Clinton innuendo – sorry).

    All kidding aside, GM needs to be held accountable mostly because NEW GM is acting like OLD GM.

    It is hard to change a corporation’s culture when most of the bozo’s who have spent their careers in that culture don’t know anything better.

    Bankruptcy might of caused a paradigm shift but they got bailed out.

    Status quo was restored.

    Hopefully this whole issue will cause the needed change.

  • avatar
    cartunez

    Another cash for clunkers? GM is already one of the government welfare queens along with the banks etc etc…I guess they will pay the fine with more taxpayer money what a joke.

  • avatar
    wmba

    Well, everything seems to be handily spiralling out of control, with the blind leading the blind and a happy horde of know-nothings happily yipping along at their heels spouting revisionism as fact.

    In other words, situation normal.

    Then one day, if and when a real judge reads the terms of the bankruptcy again, there will be a lot of ums and ahs.

    If I were GM, I’d hire Pch101 to at least bring them up-to-date, instead of all these fake big names

    • 0 avatar
      doctor olds

      GM specifically rejected your guy.

      • 0 avatar
        Pch101

        I’m really starting to question your literacy skills. As I explained to you before, I’m the one who took a pass on GM, not the other way around.

        I could see how you would have taken comfort in GM’s soul-destroying bureaucracy and liked the institutionalized division between labor and management. I didn’t, so for me, an internship was enough.

        • 0 avatar
          doctor olds

          @PCH101- I read what you write and draw my conclusions from it.

          You must love the business to spend so much time here. Why is it then, that you talents and skills have not allowed you employment in the industry?

          My opinion is based only on what you write, often well constructed and logical, but when it comes to GM, it all goes out the window.

          It is equally clear from the simplistic way you describe events in the industry that you don’t understand it very well, perhaps lack the intellectual capacity to do so.

          Your resume shows zero auto experience outside a student internship in a field office somewhere. Your presumptions about what you know about the company from that limited experience is amazing.

          I know the kind of people the car companies need, and you are clearly not it.

          • 0 avatar
            Pch101

            No, I don’t “love” the auto business. I find it interesting and I find it fairly easy to understand, but that absolutely does not mean that I’d want to work in it.

            Political reporters and analysts don’t necessarily want to be elected and are often critical of their subjects, yet they’re interested in politics as outsiders. I’m in the same camp with this subject.

            I certainly didn’t want to work for the old GM beyond my summer internship. They invited me back, and I declined to follow up. You may find it astonishing that not everyone would leap into a career at GM, but I saw enough of it to know that it wasn’t for me.

            You obviously bought into a lot of the toxic ideas that would eventually bring GM to its knees. Hubris was embedded into the culture, and you took to that like a duck to water. Some people like to feel as if they belong to a clique, and you must be one of them.

          • 0 avatar
            doctor olds

            @PCH101- The only reason the most complicated business in the world seems easy to understand to you is because you do not understand it.

          • 0 avatar
            Pch101

            I’m not sure which is worse: your kind of “expertise” causing GM to file bankruptcy, or your failure to see just how badly you guys blew it even though you’ve had years to reflect on it.

            I sincerely hope that the current GM management understand that it was the old breed and its way of thinking that caused the company to implode.

          • 0 avatar
            mcs

            >> The only reason the most complicated business in the world seems easy to understand to you is because you do not understand it.

            The auto industry the most complicated business? Try Biotech/Pharma.

    • 0 avatar
      Pch101

      That’s kind of you, but at this juncture, GM is doing a decent job of handling it. But unfortunately for them, even their best options are lousy, because there is nothing that they can do that won’t be too little, too late. This should have been handled by Rick Wagoner, and he’s long gone.

  • avatar
    Mr Imperial

    I wonder how much longer it’ll be before we hear GM say: “It depends on what your definition of the word “is” is”, or “I did not have relations with that woman.” ;)

  • avatar
    Stumpaster

    Time to burn GM down. F them.

    • 0 avatar
      highdesertcat

      Remember, Shrub and O**** chose not to do that! Brace yourself, O**** will probably push for a Cash for GM-Recalled Clunkers at $4500 a pop at taxpayers’ expense to get all these potentially dangerous vehicles off the roads.

  • avatar
    lost1

    So tell me again how GM stock is still worth twice what FORD stock is????

  • avatar
    PrincipalDan

    I grew up in a loyal GM buying family and I want to see them do well but this seems to be the company that can’t get out of its own way for the past 40 years or so.

  • avatar
    mikey

    From what I’ve seen so far, I think Mary B has handled the situation quite well.

    With out a doubt ,Mary was handed a bag of $hit. “pch101″ has it right, this problem came out of the Rick W era.

    Today its up to Mary B, and the senior management, to fix the problem. GM needs to compensate the victims . GM needs to take measures, to ensure this will never happen again.

    I believe that that the “culture” in the new GM is a vast improvement over the past, as is the product.

    Mary B has a “tough nut to crack”, cleaning up this mess. I think she has the jam to do it.

    BTW… Cameron M…Your doing a great job covering this for TTAC. Your work has been fair, and balanced.

  • avatar
    Crosley

    People want to blame the “old” GM management, but Barra was very much part of the old management team that was responsible for this mess.

    What’s funny is when she got this job, people were making sure it was known that she was a GM lifer with experience in upper management and that she deserved this job, it wasn’t just female affirmative action.

    Now that the sh!t has hit the fan, suddenly from the same crowd she’s just some soccer mom that was the scapegoat cleaning up someone else’s mess.

    You can’t have it both ways.

    Gm should have gone through a real bankruptcy. Instead they were thrown a life preserver and the same idiot management just got promoted without missing a single paycheck.

  • avatar
    mcs

    SNL pokes fun at Mary Barra in opening skit:

    http://www.freep.com/article/20140406/ENT03/304060110/gm-mary-barra-SNL


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