Key questions stalking GM CEO Barra – USA TODAY

Posted: Tuesday, April 01, 2014

General Motors CEO Mary Barra, on the job only since January, already faces what could be her toughest challenge as she faces House and Senate subcommittees this week that are probing GM’s handling of a recall of 2.53 million small cars with faulty ignition switches that GM links to 12 deaths in the U.S., one in Canada.

The switch problem first was noted by GM in 2001, and by 2006 a design change had been made, but the automaker didn’t recall any cars then.

STORY: Yet another GM recall

REMARKS: NHTSA chief says no GM defect trend evident at first

TESTIMONY: Barra can’t explain recall lag

Key questions likely to get aired in pointed fashion as Barra is questioned by members of the House and Senate committees:

Q: How could it happen?

A: Barra has been candid saying she can’t explain it, and has hired a legal heavyweight to conduct an aggressive internal investigation into the matter.

Q: Will she go to jail?

A: No, but others might. She appears not to have known anything about the problem until shortly before the February recall announcement.

And her position atop a limited liability corporation should insulate her.

But if that 2006 change in switch design was done to fix a known safety problem, and federal safety officials weren’t told, then people involved in that could have broken federal law.

Q: Will she arrange GM compensation for the victims’ families?

A: No promises. She has said GM will “do the right thing,” but hasn’t specified what. GM might — legally — need to do almost nothing. Most of the deaths happened before it went through government-scripted bankruptcy reorganization in 2009. That left “new GM” freed from most obligations of “old GM.”

Lawyers for victims’ families are trying to prove that GM knew about the deadly switch problem and covered it up going through reorganization. That could wipe out the automaker’s liability shield.

Q: How do all these other GM recalls the past few weeks relate?

A: They don’t involve the same issue, which is a faulty ignition switch that can shut off air bags. But so many are happening so fast because Barra wants to prove GM is accelerating its own product and safety reviews, and won’t wince when embarrassing public recalls are needed.

Q: Will anybody ever trust GM again?

A: It might take a long time. Dan Akerson, who preceded Barra as CEO, used to say it would take decades to recover in the public eye from poor-quality vehicles the automaker sold in years past. Adding in new wariness over these multiple recalls, and the deaths linked to the switch issue, could keep GM under a cloud for quite awhile.


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