GM: Still Reticent On Its Recall Response

Mar 27 2014, 3:02pm CDT | by

As you probably know, General Motors is in the midst of a crisis involving defective ignition switches in some of its cars.  The defect has been linked to 12 deaths and at least 31 accidents over the past decade.

What’s more, according to The New York Times, GM had received reports of the faulty switches as early as 2001—three years earlier than previously disclosed.

With the tumult surrounding “Switchgate” growing, I drafted a blog on March 13, asking “Where’s is GM’s CEO?”

Mary Barra was about to “come out.”  She authorized the release of an employee video to the press and public, and shortly thereafter, hosted a press conference at the company’s headquarters.  She spent 45 minutes with 13 representatives of major media outlets, according to PR and marketing trade publisher, Jack O’Dwyer, who writes that “there were no restrictions on the questions and everything was on the record. There is no video of the session.”

It was definitely an advance…but, in my opinion, only an incremental advance.  She did answer many safety questions in her orchestrated press conference, but the methodology of inviting reporters selectively for a company dependent on customers in almost all income strata was disappointing.  It is not too late to communicate more broadly, more rapidly.

She missed an opportunity to have an open press conference (which any reporter could attend) or a series of meetings across the U.S. with customers, their families and the American public—to which the press was invited. My guess is had she had an open press conference in New York or Detroit, it would have been standing room only.

As noted in my previous blog, and worth repeating, her unorthodox employee video released to the media had both good and bad in it. She finally admits that “terrible things happened,” but doesn’t specify what they are.  Why not be specific about the tragedy of the deaths?  One would think that, as a more than 30-year employee, she could have added further perspective to her assertion that “something went wrong with our process in this instance.”  Shouldn’t she have a clue about what the “something” was?  Was it a legal clamp that caused this hesitating?  The PR folks and the attorneys are sometimes on opposite ends, but in this case the marketplace will rule.

She did reiterate the importance of putting customers first and subsequently announced the appointment of Jeff Boyer as the company’s first safety leader, charged with insuring that GM has “the tools and resources to quickly identify and resolve product safety issues, starting immediately,” according to an article in the Detroit Free Press.

Nevertheless, we’re still left with the mystery of why the ignition switches factor didn’t merit immediate action.

In today’s transparent world, I’d say that Barra’s actions were timid.  I’d like to give her the benefit of the doubt, but she has been slow to come to the table since the revelations first began rolling in, more than a dozen years ago.   The logical inference in this situation is that she had to get things in order before talking.  Maybe there was something to hide.  Not a shining example of best-in-class.  It is particularly dangerous for a huge business dependent on trust to violate a fundamental rule of crisis communications:  tell it fast and tell it all.

Overall, I feel that, collectively, her responses fell short in detailing the steps GM is adopting to prevent a recurrence of the problems that led to this crisis.   A new appointment, an intimate little press conference, direct mail targeting owners and a customer service hotline just aren’t significant enough to transform regret into a new way of doing business.

Source: Forbes Auto

 
 

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