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One small ignition key design flaw; one giant problem for more than GM.
GM chief executive Mary Barra spoke to 10 local reporters Tuesday. (Getty Images/Paul Warner)
Long-term impacts on the company, other automakers and suppliers look potentially serious to Free Press business columnist Tom Walsh:
There will be congressional hearings, lawsuits galore, gut-wrenching TV reports on victims of fatal crashes, cheap shots from bailout haters. All this for an outfit that was just getting its legs back and breaking in a new CEO after cheating death and shedding government ownership.
Whatever the outcome for GM itself, the entire automobile industry, especially the far-flung and highly stressed network of component makers, will feel the impact for decades to come. . . .
This recall crisis may not prove to be a crushing blow for GM, if managed smartly with urgency and transparency. But anyone who tells you it’s just a minor nuisance that will fade quickly is . . . dreaming.
Walsh quotes a local product defect attorney on the potentially wide-ranging ripples:
“This will be a textbook case in product liability law because it has everything,” said Thomas Manganello, a partner in the Southfield-based law firm Warner, Norcross & Judd, specializing in auto supplier contracts, warranty issues and product liability.
By “everything” he was talking about a giant automaker in GM; a parts supplier, Delphi; the bankruptcies of both companies, and the actions — or inaction — of top federal regulators at the National Highway Transportation Safety Administration (NHTSA).
Automakers already are asking parts makers to accept contract terms that include more liability for defects, Walsh notes, and this situation likely will bolster that push.
At GM, rookie CEO Mary Barra on Tuesday acknowledged the firm reacted too slowly is addressing problems with slipping ignition keys that shut off moving vehicles and their airbags, causing fatal crashes.
“Clearly this took too long,” she told 10 local print reporters, Alisa Priddle of the Freep reports in an earlier article. "We will fix our process."
"I am very sorry for the loss of life that occurred, and we will take every step to make sure this never happens again," Barra says in a company video released Monday and embedded below.
"Any corporation in crisis would love to have a PR asset like Mary Barra," says local communication strategist Matt Friedman, who feels GM's leader is being restrained by skittish lawyers.
The limited size of Tuesday's invited media audience, which excluded TV crews, draws criticism from a Detroit area communication strategist, Matt Friedman, and business editor Rod Meloni of WDIV - who calls it a "dainty little tea and crumpet session." (More of Meloni's comments are excerpted here.)
"GM should have Barra 'making the rounds,' doing as many top-tier national, regional and local interviews as can be accommodated," Matt Friedman, co-founder of the Tanner Friedman marketing communication agency in Farmington Hills, writes in a WDIV guest post. GM's goal, he suggests, should be "to reach all of the audiences to whom the company's reputation is important right now -- potential customers, owners of affected cars, employees and policymakers."
But that kind of idea makes corporate lawyers very nervous in this situation. That's a shame. Any corporation in crisis would love to have a PR asset like Mary Barra. She's a fresh face to most audiences. She speaks very well with authority and credibility. Plus, she commands attention because she is far from the "central casting" picture of an auto company CEO.
The one-hour news briefing came a day after GM posted a video statement by Barra (below), which Walsh describes as "a wooden, scripted four-minute message" and which Meloni derides as "amateur-looking."
