Total Recall: GM’s Chance for Rebirth

by Henry Payne

Before the House Energy and Commerce Committee Tuesday, the CEO of America’s biggest auto company will apologize for her company’s negligence in pursuing a defective part that has been linked to the loss of 13 lives.  

“As soon as l learned about the problem, we acted without hesitation. Whatever mistakes were made in the past, we will not shirk from our responsibilities now and in the future,” Barra will say of the recall of 2.5 million vehicles with potentially faulty ignition switches, according to a copy of her written testimony released Monday. “That begins with my sincere apologies to everyone who has been affected by this recall. My management team and I . . . will hold ourselves fully accountable.”

Barra’a contrition is a jarring contrast to President Obama’s arrogant defense of his disastrous Affordable Care Act. America’s CEO lied about his product and has refused to recall it even as millions (including cancer patients) have suffered from the loss of their insurance and doctors. Calling for a full investigation by a U.S. attorney, Barra promises “we will be fully transparent with you, with our regulators, and with our customers.” Obama refuses anything of the sort. Such are the expectations of our political leaders vs. our business leaders.

For all GM’s troubles, “Switchgate” — named for the faulty ignition switch that can inadvertently stall cars made between 2005–2011 — could ultimately benefit Barra and her company.

As the first female CEO of an American automaker, Barra will benefit from enormous political  goodwill. She is assisted by the fact that none of the cars effected are still in production. They are relics of an old GM — a pre-bankruptcy GM that was burdened by excessive labor costs, pension overhead, and poorly designed sedan products.

With the massive recall, Barra can help sever Old GM from New GM, putting in place safety systems (she has already announced a new veep for Global Vehicle Safety) that will assure that Switchgate won’t be repeated. Indeed, the ignition snafu is an anomaly in a company — and an industry — that is quick to recall unsafe products. For example, the 2005 Chrysler Pacifica – of similar vintage to Switchgate star, the Chevy Cobalt — also had a mysterious stalling problem. It was recalled within two years of launch.

Conspiracies will abound. Did GM bury Swtichgate because of pressure to keep a new vehicle launch on schedule? Did Chevy resist the recall expense because the company was in increasing financial straits?

Perhaps.

But GM insiders say there likely is no smoking gun — that the Cobalt’s (and Pontiac Solstice, and Chevy HHR, etc.) ignition was considered by engineers to be a mechanical issue that never rose to the level of safety defect (thus, its part number was never changed even after the ignition was fixed sometime around 2007).

The deaths associated with the ignition had muddying factors — drivers were alcohol-impaired or youngsters driving in wet conditions — preventing easy connection of the dots. By the time the ignition was definitively linked to air-bag deployment — circa 2009 – the part had been repaired.

Critics — my NRO colleague Jim Geraghty among them — will rightly question whether Switchgate was further buried by a government-run bankruptcy (would NHTSA embarrass its own White House with a recall?). Fair enough. But the White House Auto Task Force was uninterested in liability — only in quickly restructuring the company’s balance sheet so that the UAW could survive and continue to feed the Democratic Party campaign cash. It was a UAW bailout, not an auto bailout.

In crisis there is opportunity, and GM has a chance to redeem itself under the hot glare of public attention. With the best products it has ever produced in showrooms now (new Corvette, new Malibu, new Tahoe, new Caddies, etc.), a new focus on customer service would do a lot of good.