May 21, 2014 at 11:01 pm

Former U.S. auto adviser: GM recall crisis 'emblematic' of cost culture

A Pontiac G6 shown outside the General Motors Orion Assembly plant in Orion Township in 2006. (Paul Sancya / AP)

Washington— Obama administration officials said at a forum Wednesday that the government-appointed auto task force was unaware of General Motors’ ignition switch problems in 2009 when it was crafting the $49.5 billion federal bailout.

Former auto adviser Harry Wilson said the auto task force was completely unaware of the issue and noted the administration was having trouble getting information out of GM at the time. “We didn’t know about anything like this,” Wilson said at a forum at the Brookings Institution on the fifth anniversary of the auto bailout. “Given how hard it was to get data out of the company at the time, even if we had asked (GM) the point-blank question, I doubt we would have gotten a straight answer.”

Citing press reports, Wilson said the recall issue apparently was not passed on to the GM executives with whom the Obama auto task force dealt with as part of the $49.5 billion GM bailout.

“It seems to have been basically stuck at the mid-level of the engineering department and not risen above that,” he said “These are all folks we never met.”

Wilson said the issue “sadly is emblematic of the cultural problems” of GM. “They would do anything to save a penny, including some really bad decisions, both economically and morally. That was a part of the culture that was driven by a company that was living on the brink of disaster for many years prior to 2009.”

Former auto czar Steve Rattner told reporters after the event that the auto task force had no idea about safety problems with defective ignition switches. “As best we know, the senior people at GM didn’t even know about it, so they can’t tell you about something they don’t know. We’re not forensic accountants. We’re not FBI investigators. We had about 40 days to do all this due diligence and we can’t find something like that out,” Rattner said.

Wilson said the corporate culture has improved dramatically since then. Wilson called the ignition switch failure “inexcusable.” He said GM’s “siloed” culture in which departments didn’t talk to one another for decades still needs to be fixed. “The company still has a long way to go.”

Former National Economic Council director Larry Summers said he didn’t recall the issue ever coming up when he oversaw the auto bailout.