Has GM’s Culture Really Changed?
Over the past two days, Congressional members in both the House and Senate listened to testimony from Mary Barra, chief officer of General Motors, as part of hearings into the car maker’s ignition switch recall. Under often tense moments of questioning, Barra repeatedly insisted that the GM of today no longer conducts business the way it had in the past.
The automaker is at the center of investigations into defective switches linked to at least 13 deaths. More troubling are documents showing that GM knew of a problem with the switches over a decade ago and made the decision not to implement solutions or a recall until last month.
The Old GM
Documents provided by GM paint a grim picture of decisions made in the company’s past. The car maker was in 2001 that there was a fault with the ignition switches. In 2005, proposed solutions to the problem were rejected by GM executives, citing high tooling and part costs that failed to represent an “acceptable business case.” The cost of the new part? 57 cents.
In 2006, the part was eventually redesigned but without a change in part number or accompanying recall, making the change virtually undetectable.
Other unsettling evidence was presented by Sen. Claire McCaskill (D-Mo.) today when she questioned Barra about GM engineer Ray DeGiorgio. In a deposition for a wrongful death lawsuit, DeGiorgio told lawyers that he was unaware of a redesigned switch. GM documents DeGiorgio’s signature authorizing the redesign strongly suggest otherwise.
Barra’s testimony to both the House and Senate insisted that GM has shifted from a cost-culture to a customer-culture. Questions about why parts that were below specification were accepted or if GM put cost over safety were repeatedly met with Barra’s insistence that was not how “today’s GM does business.” Barra highlighted company efforts to improve internal processes and a change in core values designed to put the customer first.
However, some found Barra’s testimony to be mere rhetoric.
Sen. Barbara Boxer (D-Ca.) said, “I really hate to say this, but if this is the new GM leadership, I find it lacking … The culture you are representing here today is the culture of the status quo.”
To the point, the engineer that McCaskill inquired about has not been fired by GM, despite the preponderance of evidence suggesting that he perjured himself. Although Barra has said that disciplinary action will be taken by GM once an internal investigation is completed, some found it troubling that DeGiorgio was still employed and in a position to make engineering decisions.
Senators also questioned why not all of the affected vehicles were recalled from the very beginning rather than in the three separate stages that it took.
Barra also declined to publicly commit to a trust fund to benefit families and victims affected by the defective ignition switches. She also deferred support for proposed auto safety legislation, saying that she would have to fully review it before commenting.
AUTOMOBILE ACCIDENT RESULT
$1.8 MillionExpenses: $20,000.00 | Attorneys Fees: $765,000.00 | Net to Client: $1 Million
AUTOMOBILE ACCIDENT RESULTS
$2 MillionExpenses: $78,475.96 | Attorneys Fees: $850,087.96 | Net to Client: $1,071,436.00
AUTOMOBILE ACCIDENT RESULT
$2.3 MillionExpenses: $200,000.00 | Attorneys Fees: $900,000.00 | Net to Client: $1.2 Million