Under Fire: GM’s CEO Deflects Hard Questions
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By Paul Wiseman and Dee-Ann Durbin, AP Business Writers
WASHINGTON (AP) - General Motors CEO Mary Barra didn’t squirm on the hot seat Tuesday. On the job less than three months, she calmly answered or deflected tough questions from a congressional committee about faulty parts responsible for at least 13 deaths and the recall of 2.6 million cars.
Barra frustrated lawmakers by fending off questions, saying she was awaiting the results of an internal GM investigation. She didn’t know why GM waited more than a decade to recall cars it knew had defective ignition switches. She didn’t know who was responsible for the decisions that delayed the recall.
But experts on corporate damage control said she didn’t have much choice and gave her high marks for her performance on the hot seat.
“Barra’s rope-a-dope is the best of GM’s bad options today,” said Washington crisis management consultant Eric Dezenhall. “There isn’t a corporate lawyer in the country that’s going to allow her to engage in freelance speculation about things she doesn’t know yet. No, that’s not satisfying to the public and media, but the alternative is much worse.”
Investors shrugged. General Motors Co. stock, down more than 7 percent since March 11, barely budged Tuesday, slipping 8 cents to $34.34.
Barra apologized for GM’s slowness in warning customers about the problems and promised to change the automaker’s culture to put a new emphasis on safety. “Barra held her ground, claiming that today’s General Motors is a different company from the one whose corporate culture allowed this issue to fester for a decade,” said Jack Nerad, executive editorial director Kelley Blue Book.
Ken and Jayne Rimer, whose daughter died in a 2006 accident after a faulty switch prevented airbags from deploying, found Barra’s testimony incomplete. For Barra “not to have any answers” after about three months as CEO was unsatisfactory, Ken Rimer said in the hallway outside the hearing room. “It surprised me how unprofessional that was,” he said.
Congressional appearances can be a minefield for CEOs. In 2008, automaker CEOS drew public scorn for flying corporate jets to Washington to ask for a government bailout. And Wall Street CEOs were battered in hearings after the financial crisis.
But some lawmakers appeared somewhat more sympathetic to Barra, who was thrust into a crisis after becoming the first woman CEO of a major automaker in January. In 33 years at GM, Barra worked in engineering, communications and human resources. She’s a second-generation GM employee: Her father was a GM die maker for four decades.
Not everything went smoothly for the new CEO Tuesday, who flew commercial to the hearing. Barra struggled to explain how GM could continue to use parts that didn’t meet its own specifications. When she tried to draw a distinction between parts that didn’t meet specs and those that were defective and dangerous, Rep. Joe Barton, R-Texas, said: “What you just answered is gobbledygook.”
Dan Hill, president of a Washington firm that advises clients on public relations and crisis management, said Barra erred by contrasting today’s safety-conscious GM with the belt-tightening GM that sought bankruptcy protection in 2009. “Barra threw the old GM under the bus by saying that the previous company that she grew up in and held executive positions in was based on a `cost culture’ as opposed to a `customer first’ culture,” Hill said, noting that the implicit criticism of her predecessors could be used as ammunition in lawsuits against GM.
But some corporate image experts praised Barra for seizing the initiative by announcing that GM has hired Kenneth Feinberg – who handled the fund for the victims of 9/11, the Boston Marathon bombing and the BP oil spill – to explore ways to compensate victims of accidents in the GM cars. Barra didn’t commit GM to setting up such a fund.
“She didn’t make mistakes,” says Gene Grabowski, a crisis management consultant who helps executives prepare for congressional testimony. “That’s how you survive a hearing.”
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