General Motors has no plans to fire any additional employees in connection with its defective ignition switch scandal, CEO Mary Barra said during an appearance on the NBC Today Show, though she also said she does not know if criminal charges will follow as part of an ongoing Justice Department investigation.
“That’s up to the courts,” Barra, told Today host Matt Lauer in her first television interview since GM announced it would recall 2.6 million vehicles due to a defect now linked to at least 13 deaths – and for which Barra has promised to set up a new victims’ compensation fund.
The TV appearance is apparently part of an offensive by the giant automaker to regain some sense of control over what has become its worst crisis since emerging from bankruptcy nearly five years ago. Along with the ignition switch problem, GM has recalled a total of 20 million vehicles worldwide – about 17.7 million of them in the U.S. – for a wide assortment of issues ranging from faulty taillights to fire hazards.
Only hours before Barra went on the highly rated morning show, GM confirmed it was ordering a stop-sale of all 2013 and 2014 Chevrolet Cruze sedans on dealer lots because of a potential airbag problem. It expects to have to recall thousands of Cruze models already in consumer hands because of a manufacturing mistake by airbag supplier Takata Corp. The Japanese parts company was also blamed for the recall, earlier in the week, of more than 3 million vehicles sold by Nissan, Honda and Mazda.
“If I could turn back the clock, I would, but I can’t,” Barra lamented during her Today Show interview.
The ignition switch issue – among GM’s broader safety problems — has proved to be the first big crisis in Barra’s short tenure as CEO. A 30-year veteran, she was promoted in January following predecessor Dan Akerson’s unexpected decision to retire early.
The former CEO had said he left in order to deal with his wife’s serious illness, but there has been much speculation Akerson and the GM board wanted to shift blame, hoping a woman CEO might be cut more slack. “It is absolutely not true,” Barra asserted.
Barra has taken an aggressive role in handling the crisis, putting herself in charge of GM’s response and ordering a number of rapid changes, including the appointment of a new global safety czar who has, in turn, ordered up about three dozen new recalls in recent months.
(Defective Takata airbags forces “stop-sale” of 2013-14 Chevrolet Cruzes. For more, Click Here.)
Barra also brought in Anton Valukas, a former federal prosecutor, to conduct an in-depth study of why GM waited a decade before ordering a recall to fix defective ignition switches. In his report, released earlier this month, Valukas cited a “pattern of incompetence and neglect” in GM’s handling of safety issues. Responding to the report, Barra announced the maker had fired 15 employees and disciplined five others.
Barra has also announced that Kenneth Feinberg will set up a new victims’ compensation fund with full discretion on who will qualify and how much they will be paid. Feinberg previously handled similar funds for 9/11 victims and those impacted by BP’s oil spill in the Gulf of Mexico.
(Click Here for more about U.S. automakers breaking the recall record in just six months.)
But controversy has dogged that plan, a number of people denouncing GM for not raising the apparent death toll linked to the ignition switch defect. The maker hasn’t counted those killed who weren’t in the front seat, for example.
“I think people have misunderstood,” Barra told Today Show host Lauer, “The 13 were when we first looked into this issue and looked at things that could be related to this defect. Our compensation program that we’re doing — we want every single person who either lost or had a serious physical injury to be a part of that program because we want to do the right thing.”
(To see if your vehicle is concealing a deadly defect, Click Here.)
While the maker’s safety problems have made for almost daily headlines in recent months, GM’s sales have held up surprisingly well – in fact, they have been rising faster than the overall pace of the U.S. automotive recovery. That may be because of the strong reviews many of the maker’s newest products have been receiving, industry analysts have suggested.
Asked whether consumers can now put their trust back in the company, Barra declared, “They absolutely can because we’re doing the right thing.”
We’ll never know if the people fired were negligent or just scapegoats but hopefully their dismissal was justified and not a kneejerk over-reaction of a means to appease paid liars and NHTSA.