Several key executives have handed in their resignations at General Motors. Both the maker’s PR and HR chiefs are off to “pursue other interests,” according to a GM statement, but the moves come at a critical time for the maker as it struggles to do damage control in the wake of an ongoing scandal over its handling of an ignition switch recall linked to at least 13 deaths.
The departures come at a time when GM CEO Mary Barra has had to put two veteran engineers on paid leave for their apparent role in handling a safety issue that the company reportedly knew about for at least a decade.
Facing investigations by both houses of Congress, the Justice Department and the National Highway Traffic Safety Administration, as well as a number of lawsuits over the ignition switch recall, some observers question whether there could be further departures, with CEO Mary Barra’s own tenure hinging on how she manages the recall crisis.
The announcement of the HR and PR departures appeared to have spooked already nervous investors, according to several industry observers. GM stock has been plunging in recent weeks and its shares were continuing to ride a roller-coaster Monday, albeit making some modest gains since last week’s recent lows.
(Congressional committee faults “failure within the system” at GM. Click Here for the story.)
The departure of Global Human Resources Director Melissa A. Howell comes as GM is conducting its own investigation into the handling of the ignition switch recall. Records released by the maker, along with documents introduced in several court cases, show the first signs of a safety problem were noted as early as 2001, with GM engineering management later ruling against a recall because of the projected cost.
CEO Barra last week put two managers on leave due to their handling of the problem. Those following the matter closely would not be surprised to see still other managers reprimanded, suspended or even fired. Meanwhile, documents released by a House committee last week raised further questions about just how high up the management chain knowledge of the problem went.
(For more on the decision to suspend the two veteran engineers, Click Here.)
There are no indications that CEO Barra – who previously served as GM’s global product development director was involved. Nor are there any signs that Howell chose to depart because of the ignition switch scandal. There have been numerous management changes since late last year when then-Chairman and CEO Dan Akerson decided to retire.
As for Selim Bingol, the GM global public relations chief was hand-picked by Akerson’s predecessor, Ed Whitacre, and had worked in the telecommunications industry along with both Akerson and Whitacre. While Bingol was respected for his strategic approach to the job he was relatively uninvolved in more traditional public relations duties and seldom seen at GM media events; he was largely unknown by most of the journalists who covered the automotive industry.
His focus on strategic planning was certainly critical in recent months, as GM struggled to find a way to minimize the damage from the ignition switch problem. But Bingol had also been on hand for a variety of other challenging tasks, including the November 2010 General Motors IPO and the company’s eventual break from the federal government which pulled GM out from its 2009 bankruptcy with a nearly $50 billion bail-out.
GM immediately announced a replacement for its HR chief, appointing John J. Quattrone to the Senior Vice President position. A Syracuse, NY native, he has been with the maker since landing a job at its Fisher Body plant in northern New York 39 years ago. He had been handling human resources for GM’s powertrain operations since 2001.
As for the Global Communications and Policy Post, another company veteran, investor relations director Randy Arickx will take over on a temporary basis. But as with Bingol, GM is expected to reach outside for a permanent replacement.
(Click Here to find out what’s behind the ongoing recall frenzy.)