General Motors Company (NYSE:GM) has already been forced to recall over three million vehicles globally this year. Now it is left to newly appointed CEO to clean up General Motors’ mess. Yesterday, Barra took the initiative to point out that the company mishandled complaints about the safety of a number of small cars developed over a decade ago. While the problem won’t go away, Barra is racing to minimize the damage to General Motors’ already suspect reputation. One leg of the race ended today when Barra appointed Jeff Boyer, who joined General Motors in 1974 as a co-op student to take the role of global safety chief.
General Motors: The appointment and the apology
“Jeff’s appointment provides direct and ongoing access to General Motors Company (NYSE:GM) leadership and the Board of Directors on critical customer safety issues,” Barra said in the statement that followed her apologies to consumers. “This new role elevates and integrates our safety process under a single leader so we can set a new standard for customer safety with more rigorous accountability. If there are any obstacles in his way, Jeff has the authority to clear them. If he needs any additional resources, he will get them.”
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Those apologies, however, will not stop any of the four investigations that General Motors is presently facing over its Chevrolet, Pontiac and Saturn models with faulty ignition switches. General Motors Company (NYSE:GM) is facing an investigation by the National Highway Traffic Safety Administration, as well as hearings in the U.S. House and Senate. GM also is the focus of a Department of Justice probe.
What went wrong?
“Something went wrong with our process in this instance and terrible things happened,” Barra told employees in a recorded message on the company’s website yesterday. “As a member of the General Motors family and as a mom with a family of my own, this really hits home for me. We have apologized. But that is just one step in the journey to resolve this.”
Beyond the direct costs of the recall which are expected to reach $300 million, the perceived recklessness by General Motors will cost them a ton of money and years of disrepute.
General Motors Company (NYSE:GM) discovered ignition-switch problems in 2001 while creating the Saturn Ion. The company mistakenly believed the problem had been fixed at the time they went into production. The Ion, Cobalt and other small cars were recalled in two waves last month, more than a dozen years after the flaw was discovered. As a result of the design flaw, the switches slipped out of position causing airbags not to deploy during crashes.
After 40-plus years, Boyer has earned the position that will report to John Calabrese, General Motors vice president of Global Vehicle Engineering and become a member of Global Product Development staff, led by Mark Reuss, executive vice president, Global Product Development, Purchasing and Supply Chain.
“If there are any obstacles in his way, Jeff has the authority to clear them,” Barra said in the statement today. “If he needs any additional resources, he will get them.”