GM’s Barra Bringing Legacy of Safety Fights to Congress

March 31 (Bloomberg) -- Matt Miller reports on GM’s Congressional recall hearings. Miller speaks on Bloomberg Television’s “In The Loop.” (Source: Bloomberg)

General Motors Co.’s Mary Barra will bring corporate baggage to Washington when she testifies before Congress this week: GM’s history of contentious battles over vehicle safety stretching back 50 years to the Corvair.

Less than three months into her tenure as chief executive officer, Barra, 52, faces a grilling starting tomorrow over vehicles linked to the deaths of 13 people. The automaker has recalled about 2.6 million cars after revelations that an ignition flaw caused models including Chevrolet Cobalts to lose power. Last week, the company added 559,000 trucks and 200,000 Cruze compact cars to the recall for different safety issues, bringing the global total for this year to about 5.1 million vehicles. Lawmakers want to know why GM, though aware of the ignition problems in 2001, didn’t recall the cars earlier.

Barra has apologized and released a timeline that the Detroit-based automaker says provides details going back more than a decade on what it knew about the problem and what steps were taken in response. Still, Washington veterans aren’t likely to forget GM’s bruising fights with regulators and safety advocates such as Ralph Nader. Among the battles, GM has pushed back against claims in the 1990s that its side-saddle gas tanks made pickups vulnerable to explosions and tangled with safety advocates over changes to air bags.

Source: General Motors Co.

Mary Barra has apologized and released a timeline that the Detroit-based automaker says provides details going back more than a decade on what it knew about the problem and what steps were taken in response. Close

Mary Barra has apologized and released a timeline that the Detroit-based automaker says... Read More

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Source: General Motors Co.

Mary Barra has apologized and released a timeline that the Detroit-based automaker says provides details going back more than a decade on what it knew about the problem and what steps were taken in response.

Hearings Beating

“That’s certainly what’s on the minds of people who have seen these recalls in the past. She’s going to take a beating over that, there isn’t any question about that,” said Chris Malone, a managing partner at Fidelum Partners, who has studied the effects of recalls on brands.

After months of studying ignition-switch failures in the Chevrolet Cobalt, GM canceled a proposed fix in 2005, when a project engineering manager cited high tooling costs and piece prices, according to documents obtained by U.S. congressional investigators.

A separate opportunity to address the defect was passed over by the National Highway Traffic Safety Administration in 2007, when it opted not to open a formal defect investigation even after an agency official had said a probe was justified, according to an interview between current NHTSA officials and staff members of the House Energy and Commerce Committee.

Those decisions will be a focus of congressional hearings tomorrow and April 2. Besides Barra, acting NHTSA Administrator David Friedman will testify.

Photographer: Andrew Harrer/Bloomberg

General Motors Co. Chief Executive Officer Mary Barra has apologized and released a timeline that the Detroit-based automaker says provides details going back more than a decade on what it knew about the problem and what steps were taken in response. Close

General Motors Co. Chief Executive Officer Mary Barra has apologized and released a... Read More

Close
Open
Photographer: Andrew Harrer/Bloomberg

General Motors Co. Chief Executive Officer Mary Barra has apologized and released a timeline that the Detroit-based automaker says provides details going back more than a decade on what it knew about the problem and what steps were taken in response.

‘Too Aggressive’

Joan Claybrook, a former NHTSA head, says GM’s “default is definitely to fight. They have been very aggressive and I think it’s always gotten them in trouble when they get too aggressive. They were aggressive with Ralph Nader and they made him a national hero.”

Claybrook herself recalls feeling pressure from GM. When the automaker pushed back in the 1990s at efforts to make changes to air bags after the deaths of several children, she said, the company helped orchestrate an effort to paint her as being responsible because she originally advocated for the bags.

“Not a whisper campaign, it was very overt,” she said. “It takes a lot of time to fight back.”

In an e-mail, the automaker called Claybrook’s assertions “baseless.”

In the 1990s, GM repeatedly denied reports that gas tanks in 5 million to 6 million pickup trucks built between 1973 and 1987 were vulnerable to fire and explosion in side collisions. The company managed to make itself the victim after NBC’s “Dateline” admitted staging a crash test using an incendiary device for a report highlighting the issue.

‘Good Camouflage’

“That was a good camouflage of the real issue,” said Clarence Ditlow, executive director of the Center for Auto Safety. “One of the standard tricks they pull out is to create a diversionary tactic and to take the attention away.”

The automaker reached a settlement in 1994 with the U.S. Transportation Department after then-Secretary Federico Pena said the automaker knew the trucks had a safety defect and failed to fix it or warn the public. While the settlement didn’t include a recall, it required GM to spend $51 million in safety programs, according to the Center for Auto Safety.

Years of frustration about GM came to a head in late 2008 when the automaker sought Congress’s help to stave off collapse. Then-CEO Rick Wagoner endured multiple hearings in which he and other Detroit executives faced tough questions and criticism. While Congress balked at helping GM, the government ultimately spent about $50 billion bailing out the company.

Less Contentious

Barra has adopted a less contentious approach than some of her predecessors, telling reporters that it “took too long” for the company to respond to the ignition flaw. She has also appeared in Web videos, in which she expressed contrition and sends condolences to families for their losses. GM has also begun an internal investigation into the ignition safety flaw.

“Mary Barra provides a strong voice to what drives today’s GM,” GM said in an e-mailed statement. “Our full focus and energy is on what we can do now to take care of our customers and make our safety processes world class. We are cooperating fully with Congress and the NHTSA to help them have a full understanding of the facts.”

The approach has earned praise from such observers as Jeffrey Sonnenfeld, a business professor at Yale University.

“Mary has jumped past that defensive, circle-the-wagons, over-lawyered response that is especially problematic for new people who haven’t yet found their public voice,” he said. “She is writing the new case study of how this should be handled.”

GM’s recent troubles seem familiar to Nader, whose 1965 book “Unsafe at Any Speed” famously detailed how the Chevrolet Corvair’s design posed several dangers to drivers.

GM tried to intimidate and discredit Nader and was widely reported to have hired private investigators to look into his private life. Corvair sales plummeted after his book was published, and Nader’s work led to NHTSA’s creation.

Asked about GM’s recent handling of the ignition flaws, Nader said “it’s sort of a here-we-go again syndrome. It illustrates that the internal organization of GM still has very serious problems.”

To contact the reporter on this story: Tim Higgins in Detroit at thiggins21@bloomberg.net

To contact the editors responsible for this story: Jamie Butters at jbutters@bloomberg.net Robin Ajello

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