How Could GM Execs Not Know About Ignition Fault?

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March 18 (Bloomberg) –- Francisco Sanchez, former Commerce Department undersecretary for international trade, and Bloomberg's Jamie Butters discuss GM's recall of 1.6 million compact cars on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Editor -- bloomberg's auto editor.

It seems like this is one of her first orders of business, right?

She just came on board.

She found out about this recall, found out about the investigation of it in december and her last weeks as developments chief.

She became the ceo in mid-january and by the end of the month they decided they needed to do this recall.

It has dominated her opening months on the job.

She has had to find yourself trying to get her hands on this and out the bleeding, stop the damage at gm.

This is the first structural change said she took the job and everybody got their new jobs.

And creating this new decision of vice president in charge of vehicle safety, really human safety -- isn't it [indiscernible] i mean, they are a car company, right?

There are people who do this stuff, but it was not as high of a level.

This is still a few notches -- we're not talking about chief quality officer, who reports directly to the ceo.

This is someone who reports to someone who reports to who had mary's old job.

This is someone who looks at just engineering or just design who looks of the problem and says this is where the problem started and how we fix it.

Ok, just because we are journalists then we are all picked, jamie, if she does this, this may be more of a communications effort than something substantive?

You wonder why her predecessor did not do something about it.

You wonder why his predecessor did not do something about it.

You wonder why the auto czars did not do anything about it.

We have known about it for a long time.

Jamie, this is a problem they have known about for -- more than a decade.

Is it?

More than a decade now?

2001 they found problems when they were developing a vehicle.

They thought they fixed it.

They started making the models around 2003. they started getting complaints, but they thought they had a fixed.

I doubt ed would have known anything about this.

There would be mechanic semi, car salesman who would know, low level engineers who would know.

A lot of the pr folks in 2005 when it was getting written about in "the new york times," they knew about it.

The folks who came in later, they probably did not do that much reading on that level of stuff when they came in.

There are questions about who knew what when.

What do you think the u.s. government might know about this?

First of all, i would give the ceo the benefit of the doubt.

I do not think this is a publicity stunt.

Clearly this is a problem that has been around for 10 years and has not been dealt with.

I'm giving her the benefit of the doubt.

You are not a journalist.

I'm not a journalist.

And those folks, steve ratner, those folks from the government -- the board is not responsible for day-to-day operations.

There was clearly a problem, but i would not blame it on the board of directors.

If there was a problem with the bloomberg terminal that was killing users, i feel like our board would get directly involved.

Don't you think?

I agree, but apparently it did not get to ms.


That is the cynic in me.

Jamie, how could she as the head of product development not know about this?

Journalists knew about it very well in 2005. how were executives not aware of something that could lead to deaths?

In 2005 and 2006 -- what they knew -- did they know they were killing people and needed to do a recall?

Probably not.

They knew that cars shut off sometimes and they had a fix for that.

She may have known something about that.

She said she did not know about this instance until december.

A big part of how companies handle the stuff is you do not spam every top executive in the company with an e-mail about every potential problem that may have lawsuits attached to it later.

That way they are not liable.

The cfo, right?

There is a financial impact, but do you need to tell the cfo about every quality impact?

Probably not.

You do not want everything being gobbled up and publicized when it is not about the cfo.


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