GM CEO Mary Barra faced tough first year, but sees progress

GM CEO Mary Barra speaks at the JD Power/NADA Automotive Forum in New York.
PHOTO: Steve Fecht for General Motors

DETROIT—General Motors CEO Mary Barra said that her first year on the job contained both disappointment and progress, as the company recalled a record number of cars and trucks but also improved its handling of safety problems.

Barra, who last January became the first woman to lead a major automaker, almost immediately faced a crisis over defective ignition switches that are now linked to at least 42 deaths.

Barra said the crisis forced GM to quickly acknowledge its shortcomings and address them. She appointed a new safety chief, swept out 15 employees and changed the company’s product development process to focus more on quality and safety.

During the year, GM issued 84 recalls covering more than 30 million vehicles. That included 2.6 million small cars recalled for ignition switches that could shut off engines without warning. The problem also disables power steering and brakes, as well as the air bags.

GM was forced to admit it knew about the problem for more than a decade before recalling the cars. It was fined $35 million by the government for concealing the problem and is under investigation for possible criminal charges.

Barra says GM will support a national database of vehicle identification numbers so automakers can quickly find owners of recalled cars. But she wouldn’t say if GM will back legislation calling for stiffer fines or criminal penalties for executives who hide safety defects.

Barra has maintained that she didn’t know about the switch problems until late December of 2013, even though as head of product development she was in charge of safety for the company.

“It was clearly a tragedy, it was very difficult and it was deeply troubling,” she said of the switch problems.

Here are five thoughts from Barra on her first year in office and what’s ahead for her and General Motors:

• Despite being hit with the recall crisis just after becoming CEO, Barra said she didn’t feel like she was ambushed. “The situation occurred and we had to deal with it. There wasn’t time to sit there and say this is good or bad. We’ve got to face it.”
• GM has hired compensation expert Kenneth Feinberg to settle claims with families of those killed or injured in ignition switch crashes. With the claim deadline three weeks away, Barra says GM has not changed its cost estimate of $400 million to $600 million.
• Keeping the North America management team focused despite the crisis and working with dealerships. GM’s sales grew a little over 5 per cent last year and nearly kept pace with market growth.
• Lower gas prices won’t change GM’s strategy to push for fuel efficiency across its model lineup, she says. The company will adjust production to sales, and is prepared to make more trucks if necessary.
• GM expects U.S. sales to rise about 2 per cent to around 16.8 million cars and trucks this year.