After Recalling 6.1M Vehicles, GM Faces Another Test for Survival: Congress

Tuesday, April 01, 2014

Mary Barra, a new CEO of US carmaker General Motors GM addresses the media during a news conference at the headquarters of the company's German subsidiary Opel in Ruesselsheim, on January 27, 2014. (DANIEL ROLAND/AFP/Getty)

Today, General Motors CEO Mary Barra testifies before Congress, as her company recalls yet another 1.5 million vehicles because of problems with electronic power-steering, which can suddenly stop working, making the vehicles harder to steer.

There are several GM models involved in the new recall, all spanning from the years 2004 to 2010. This latest round brings the total number of GM vehicles recalled up to 6.1 million since February. The total recall-related costs for the first quarter could total up to $750 million.

Now Barra will have to answer questions about what GM knew about the ignition switch problems in its cars, and when the company knew it.

David Cole, chairman emeritus of the Center for Automotive Research, examines the latest recall and looks at the future of General Motors. 

"People should understand that when you do a recall, there may be only a very teeny fraction of the vehicles that have a problem," says Cole. "In fact, what triggered this with the ignition system is something that we've seen over the years and that is you can have very serious problems, but to get to the data that tells the story is extremely difficult."

Cole says that GM is working with the National Highway Traffic Safety Administration to address these problems, but adds that finding defects in giant swaths of car data can be extremely challenging, which he says is likely the reason this information has been delayed for years. The ultimate objective for the company and for the NHTSA is make sure that even very infrequent but potentially serious defects are caught quickly, which can sometimes be easier said than done.

"It is extremely rare, but it is a potential problem," says Cole. "Getting that story to a point where you get action is not as easy as you might think in a very complex organization. It's the same kind of thing we see with healthcare and the Affordable Care Act—it seems easy on the forefront of doing this, but the execution when you're dealing with complex systems and complex organizations is very, very difficult."

Though defect data can be difficult to collect when dealing with millions of vehicles, Cole says that when a problem is identified, an honest and immediate response is vital.

"One thing everybody should be aware of—and this is true of GM and every auto maker in the world—is that the worst thing you can do is try to cover up something," he says. "There's never an attempt to do this. The system somehow didn't work to get all of the data where it could tell the story to proceed to fix these vehicles."

It's not just GM that missed these potentially dangerous defects: Regulators at the NHTSA also may have missed stepped. 

"I think there were errors everywhere," says Cole. "Historically, the auto industry and the National Highway Traffic Safety Administration have worked very, very closely together on this, but when you put large organizations together sometimes things can slip between the cracks. We've got to get to the bottom of this, make sure that the system is far more robust than it is and move on from there."

While some may speculate that slow movement or missteps on the part of the NHTSA might be an attempt to protect GM, which was bailed out by the government in 2009 during the early days of the financial collapse, Cole believes that is incorrect.

"I think you will find that that is not the case—whether you're in government or in the auto business, if you know something and try to hide it, that is a cardinal sin," he says. "In fact, anytime somebody down in an organization attempts to hide something that is important, that is grounds for immediate firing when it's found out—there's just no question. The cover up is the worst thing you can do."

When it comes to Barra, GM's new CEO and first female to lead the organization, Cole says he believes she will have no problem testifying before Congress.

"She's a really talented woman," he says. "But this is her first time on a really public stage. It is a very interesting and challenging spot for her, but I think what people will find out is that she is extremely concerned about this, she's very competent, and I think she'll prove to be an exceptional leader over the years at General Motors."

 

Guests:

David Cole

Hosted by:

Todd Zwillich

Produced by:

Jillian Weinberger

Editors:

T.J. Raphael

Comments [5]

I would like to hear an explanation from this program as to why they used an industry shill as an "expert commentator". And why they did not challenge any of his obviously dissembling answers.

Apr. 01 2014 06:13 PM
tom LI

When are Americans going to truly wake up? When are we as a collective going to wake-up to the facts about how little American Corporations care about the American public in any shape or form.

The historical record is clear that if it wasn't for regulations - that are actually enforced - most corporations, and even right on down to the most of the Mom and Pops, would be cutting every last corner, looking for any and all means to put out just-good-enough products.

The historical record is also clear that the "Free" (lol) Market will only do any sort of self-correcting, collectively or in its parts when it comes to profits, and nothing else will correct it!

But here we are listening (over and over here and elsewhere) to some shill for the American Auto Industry telling us the complete opposite of the historical record!

Buy a car or a toaster oven at your own risk! Buyer beware has never been more appropriate in this day when so many of our consumables are now made in sweat shops over-seas.

Apr. 01 2014 05:19 PM
PF from NJ

Todd asked if the Obama administration was asleep at the switch in this issue of faulty ignition switches. Everything I have read indicates this problem was known to the previous administration as well. So, more than one administration bears some burden of not having acted here.

Apr. 01 2014 03:23 PM

this is outrageous even for corporate radio. your guest "expert" simply gives conclusionary statements that GM would not cover up the problem AND that any delay in announcing that repairs were needed was only the result of GM's large size. Really? of course no evidence is provided simply the assurances of the dude that GM wouldn't act badly. This in the face of GM's sorid history along these lines, including the history of these particular problem where lower level employees apparently made attempts to get the facts out to the public and the repairs authorized.

Not to mention that the so-called expert is from the "center for automotive research", the commonly acknowledged PR front for the auto industry. Or, as its website puts it, "the voice of the automotive industry".

YOU GO, CORPORATE RADIO!!!!!!

Don't forget to demand that we send you money.

Apr. 01 2014 11:33 AM
Larry Fisher from Brooklyn, N.Y.

David Cole's confident tone made me believe that I could drive any car that he would say it was alright to.

Apr. 01 2014 11:23 AM

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