Barra: First Year as GM CEO Marked by Disappointment, Progress

Mary Barra said Thursday that her first year as CEO of General Motors contained both disappointment and progress, as the company recalled a record number of cars and trucks but also improved its handling of safety problems.

Barra, who last January became the first woman to lead a major automaker, almost immediately faced a crisis over defective ignition switches that are now linked to at least 42 deaths.

In an hour-long meeting with reporters, Barra said the crisis forced GM to quickly acknowledge its shortcomings and address them. She appointed a new safety chief, swept out 15 employees and changed the company’s product-development process to focus more on quality and safety.

During the year, GM issued 84 recalls covering more than 30 million vehicles. That included 2.6 million small cars recalled for ignition switches that could shut off engines without warning. The problem also disables power steering and brakes, as well as the air bags.

GM was forced to admit it knew about the problem for more than a decade before recalling the cars. It was fined $35 million by the government for concealing the problem and is under investigation for possible criminal charges.

Barra says GM will support a national database of vehicle identification numbers so automakers can quickly find owners of recalled cars. But she wouldn’t say if GM will back legislation calling for stiffer fines or criminal penalties for executives who hide safety defects.

Barra has maintained that she didn’t know about the switch problems until late December of 2013, even though as head of product development she was in charge of safety for the company.

“It was clearly a tragedy, it was very difficult and it was deeply troubling,” she said of the switch problems.

Here are five thoughts from Barra on her first year in office and what’s ahead for her and General Motors:

NOT AMBUSHED: Despite being hit with the recall crisis just after becoming CEO, Barra said she didn’t feel like she was ambushed. “The situation occurred and we had to deal with it. There wasn’t time to sit there and say this is good or bad. We’ve got to face it.”

RECALL COST: GM has hired compensation expert Kenneth Feinberg to settle claims with families of those killed or injured in crashes caused by a defective ignition switch. With the claim deadline three weeks away, Barra says GM has not changed its cost estimate of $400 million to $600 million.

BIGGEST ACCOMPLISHMENT: Keeping the North America management team focused despite the crisis and working with dealerships. GM’s sales grew a little over 5 percent last year and nearly kept pace with market growth.

GAS PRICES: Lower gas prices won’t change GM’s strategy to push for fuel efficiency across its model lineup, she says. The company will adjust production to sales, and is prepared to make more trucks if necessary.

SALES PREDICTION: GM expects U.S. sales to rise about 2 percent to around 16.8 million cars and trucks this year.

In her first year, Barra did about as well as anyone could have to lead the company through a crisis, says Kelley Blue Book senior analyst Karl Brauer. He said she took action quickly, which wasn’t standard procedure for GM or other automakers. “Once Mary took charge and was aware of the issue, she did everything right in addressing it,” he said.

But Laura Christian, who lost her daughter in a 2005 crash in Maryland, says Barra was forced to do the recalls and compensate victims after the company’s longtime knowledge of the problem was revealed in court cases. “She didn’t do this out of the goodness of her heart,” Christian said.

This article appeared in print in the January 9th, 2015 edition of Hamodia.