GM's challenge: 'Reassure the world'
December 18, 2014
General Motors could face a decade of lawsuits and regulatory headaches over its delayed U.S. recall of 1.37 million vehicles with suspected faulty ignition switches.
But GM CEO Mary Barra’s more urgent challenge will be convincing the public that her company is taking responsibility for the problem, said Richard Torrenzano, a reputation and crisis-control consultant.
At stake is GM’s refreshed post-bankruptcy image as a carmaker with a new sensitivity to its customers, Torrenzano and other outside industry experts say.
The image had been cultivated by Barra herself before she took over as CEO two months ago. And she is spearheading an internal review to provide "an unvarnished report” of what happened in the years leading up to last month's recall of the Chevrolet Cobalt, Saturn Ion and four other nameplates to replace ignition switches that can be jostled out of position, cutting off power to the engine and airbags.
“Barra is taking all the right steps to deal with this issue internally at the corporation -- but not externally yet,” says Torrenzano, CEO of the Torrenzano Group in New York, who has no ties to the issue. Only “saying she didn’t know about this isn’t going to fly. She needs to be completely transparent on who knew what, when they knew it, and what prevented the problem from being addressed.
“Corporate legal departments hate that sort of transparency. But GM needs to face facts. There will be no getting around the disciplinary and financial repercussions that GM and some of its executives are going to face from this,” he added.
“GM’s investors, market analysts, people who own unaffected GM cars and people who are future customers all want to know what went wrong and who is to blame.”
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