GM’s Fatal Errors
There’s a passage in Chuck Palahniuk’s novel Fight Club where the narrator tells an airline seatmate that his employer, an automaker, determines whether to recall defective cars based on whether the cost of settling lawsuits over fatal crashes will be lower than the cost of recalling the cars. His seatmate asks which car company employs him. He replies, “A major one.”
In a grotesque instance of life imitating art, Bloomberg Businessweek ran a story this week about how General Motors tried to silence a whistleblower who attempted to get the company to recall millions of vehicles with an ignition switch defect that has led to at least 13 deaths and 54 crashes. A colleague of his is quoted as saying that GM wouldn’t recall the vehicles, despite widespread acknowledgment of the danger posed by the flaw, because it would be too expensive.
So far this year, GM has been forced to recall 20 million cars to fix this and other problems. It has known about the ignition switch problem since at least 2005. GM hired former prosecutor Anton Valukas earlier this year to investigate the matter and he submitted his report this week to GM CEO Mary Barra.
In a sign that GM’s spokespeople are either completely out to lunch or completely overruled, Barra had the nerve to submit the report to the House Energy and Commerce Committee with passages blacked out. Needless to say, the lawmakers raked her over the coals at a hearing on Wednesday.
Barra has been scurrying around trying to keep GM from looking totally sociopathic since she took the helm in January. The company had made some progress towards repairing its image as a hidebound maker of mediocre rattletraps since its government bailout in 2009. Some of its newer cars have even received reasonably positive reviews. Those efforts are now in tatters.
There is a lot of talk in PR circles about what GM should do to rebuild its reputation. Its first step – firing two more people than its cars managed to kill – was laughably inadequate. A company this tone deaf might never regain the public’s trust – and that might be a good thing, for the public, at least.