GM focuses on customers amid recall investigations

General Motors said Wednesday that it is focusing on the peace of mind of its customers as it faces investigations from the Justice Department into its handling of faulty ignition switches that led to a recall of 1.6 million cars last month.

DETROIT: General Motors said Wednesday that it is focusing on the peace of mind of its customers as it faces investigations from the Justice Department into its handling of faulty ignition switches that led to a recall of 1.6 million cars last month.

The automaker knew about the defects to the Chevrolet Cobalt, which have been linked to 13 deaths, for a decade, but did not issue a recall until recently, according to various media reports.

"While it is true that upon exiting bankruptcy, the new GM lost liability for incidents or accidents occurring prior to July 2009, we have made no decision about claims involving vehicles in this recall," Greg Martin, GM’s executive director of communications strategy, told PRWeek. "Our principle throughout this process has been to the put the customer first, and that will continue to guide us."

Martin said he could not disclose GM’s communications strategy. He added that the company is working with PR firms it had previously retained, but did not provide additional details.

GM has employed a range of agencies across holding companies, including Weber Shandwick from Interpublic Group and Publicis Groupe’s MSLGroup. GM worked with FleishmanHillard on Mary Barra’s transition to the CEO role late last year and in early 2014.

Last month, GM said it was recalling the vehicles because of ignition-switch problems amid media reports that the company knew about the issue for 10 years. The Justice Department is exploring if GM broke any laws with the response, and two congressional committees are reportedly also looking into the matter. A former leader of the National Highway Traffic Safety Administration has also demanded a probe into why the federal agency did not demand a recall more quickly.

GM should tell its side of the story through the media, explain why things will be different in the future, and keep the business running, Dartmouth College corporate communication and responsibility professor Paul Argenti wrote Tuesday on a Harvard Business Review blog.

"While news reports say [Barra] ordered an apology, it’s not clear whom she was ordering to apologize," Argenti wrote on the blog. "The first rule of crisis communication is to admit your mistakes publicly. While this may drive your lawyers crazy, it will build tremendous goodwill in the court of public opinion."

In a March 4 letter to GM staffers, Barra, who became GM’s CEO in January, said in response to the crisis that the company has created a working group of executives that she will lead to direct GM’s response, monitor progress, and make adjustments as necessary. She also launched an internal review to give the automaker an "unvarnished" report on what happened.

"We will hold ourselves accountable and improve our processes so our customers do not experience this again," wrote Barra, adding that the company’s reputation will not be determined by the recall itself but by how GM addresses it. "We sincerely apologized to our customers and others who have a stake in GM’s success."

Barra has declined all requests for interviews about the subject. She only found out about the defect on January 31, the first time any senior executive had been told about the problem since it surfaced a decade ago, according to reports.

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