3 Things GM's Mary Barra Must Do To End The Recall Crisis

Apr 1 2014, 10:18am CDT | by

3 Things GM's Mary Barra Must Do To End The Recall Crisis
Photo Credit: Forbes Auto

Tuesday and Wednesday are General Motors CEO Mary Barra’s days in the Congressional hot seat. As with her predecessors in Detroit and Tokyo, Barra can expect the blare of camera lights, admonishment from lawmakers, achingly sad stories from accident victims and a lot of pontificating from pundits who’ve never written a word about the GM recall crisis.

These are days that make or break careers. Already, there is plenty of discussion about whether GM’s new chief executive, in her third month on the job, will survive the recall crisis that has swept the largest U.S. automaker. On Monday, GM widened its recall-related charges to $750 million for the first quarter, and it announced yet more recalls, bringing the total to 6.1 million since February.

In another era, there would be no question that GM would lock arms behind its CEO, protecting him (since Barra is the first woman) from the slings and arrows. But Barra comes at a time when GM CEOs are disposable. There have been five in the past five years, making the entrance to GM’s Renaissance Center headquarters a revolving door.

But Barra still has plenty of influence as she sits at those Congressional hearing tables, and the way she uses it will determine how GM handles the crisis. Here are three things she must do this week, and in coming weeks, to stop the recall crisis.

1) Provide complete transparency. Barra has become the public face of GM’s recall, and as such, she cannot fall back on spin. She has apologized numerous times, and will again before Congress. But apologies are empty if there is not a way to see what the CEO is apologizing for.

At this moment in time, the best strategy is to be completely transparent. Legal considerations aside, make documents available. Construct a detailed timeline of what happened and why. Although GM has set up a website for information about the recall, journalists from Automotive News, Bloomberg and the Wall Street Journal are among those setting the narrative, thanks to their diligent reporting. Without transparency, GM will never get control of its own story.

2) Deal with the culture. For years, everyone covering GM has heard company executives insist that the old, bureaucratic GM is gone. GM’s previous CEO, Daniel Akerson, spoke repeatedly about his quest for change. And yet, if the recall reports are even a shred true, the Old GM is alive and well. Engineers decide to make fixes and don’t change part numbers in order to cover their tracks. Cost cutting still prevails over quality. And no one tells the CEO what’s going on, given that Barra learned of the situation only upon her promotion. We haven’t heard yet from Akerson, which might clear up how much information got to the top.

It’s no longer sufficient for Barra to be another member of the Greek Chorus contending GM has changed. She has to be a different kind of GM CEO (with apologies to Saturn). Barra has already been in the public eye more on this recall than other executives might have been, with the exception of Jacques Nasser at Ford more than a decade ago. She sets the tone for the company, but she also needs to write the music. Barra’s chance to finally fix the way GM does things has come.

3) Learn from the mistakes. In 2012, GM encountered a mini-version of what’s now happening, and it bungled its response. It discovered that its chief marketing officer, Joel Ewanick, improperly handled a contract making GM the sponsor of Manchester United, the world’s most valuable sports team. Instead of openly explaining what happened, GM conducted a whisper campaign. Senior executives made off the record phone calls to journalists, blaming him alone for the situation, when GM’s own culture was a contributor.

GM can’t act that way this time. The recall crisis isn’t the fault of the media, errant drivers or untrustworthy suppliers. The fault lies within itself. As Barra herself has said, “Terrible things happened.” Barra, and others, have to learn from the mistakes made in the way the ignition situation was handled internally, and implement changes to keep them from happening again.

That’s a tall order, as evidenced by how wide and deep the reports show GM’s problems to be. But if GM is to prove that President Obama was right to spend $50 billion to fix the company, it’s imperative that GM root out these issues, and resolve them. Only then, can Barra stop the recall crisis.

Source: Forbes Auto

 
 

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