GM CEO Mary Barra can expect a bumpy ride when she appears Wednesday before a U.S. House panel. (Evan Vucci / AP)
There will be no third chance for Mary Barra.
The General Motors Co. CEO is scheduled to return to Capitol Hill Wednesday with her hand-picked investigator, Anton Valukas, to explain more fully “the incompetence” that culminated in an ignition-switch fiasco that claimed at least 13 lives, caused dozens of accidents and is manufacturing a wave of lawsuits.
She should buckle up for what will likely be a bumpy turn before the House Energy and Commerce’s oversight and investigations subcommittee, as well as next month before a Senate panel. This could get ugly, for a GM that recalled another 3.5 million cars Monday and for members of Congress largely incapable of letting pass an election-year chance to preen before TV cameras.
The congressional outrage is predictable — for both the political opportunity such hearings offer and that fact that GM’s corporate conduct over the last dozen years in connection with “Switchgate” is so reprehensible. Too many people in too many positions of authority knew about the problems, Valukas found, and too many did nothing until is was way past too late.
Barra, on the job since mid-January, cannot dodge what is likely to be aggressive questioning from House members. Valukas’ 315-page report, in all its sickening detail, is complete and public; Barra has fired 15 people and disciplined five more; lawsuits are stacking up like parts on the factory floor; and other lawyers alleging fraud are pressing to reopen GM’s historic bankruptcy case.
A memo by committee staff, released in advance of Barra’s appearance, said GM had shipped 339,672 ignition switch repairs kits across the United States as of June 11 and had repaired 129,583 vehicles — roughly 5 percent of the 2.6 million Chevrolet Cobalts and similar GM cars first recalled because of the dodgy switch.
Not fast enough, no doubt, for lawmakers who generally have no idea how long it can take to tool production lines to build components for cars no longer in production. Meaning it falls to Barra to explain why the fixes are taking so much time, why recalls are mounting, and how GM plans to shape the scope of a victims’ fund to be overseen by Kenneth Feinberg, a prominent compensation expert.
This week’s hearing marks yet another chapter in Barra’s baptism by fire, a scandal likely to shape what kind of CEO she will be and will be perceived to be. The corporate crisis forced her to fire subordinates, to restructure the company’s woefully dysfunctional safety apparatus, to re-evaluate GM’s legal staff, including General Counsel Michael Millikin, and to publicly detail GM’s serial failures behind the ignition switch mess.
It also is forcing her to atone for those sins, and more, before members of Congress mostly interested in a) who pays or b) who got fired or c) who may be criminally indicted in ongoing investigations. Whatever their histrionics, questions still will remain whether federal regulators did their jobs properly or whether GM’s switch fiasco is the culturally clarifying event that the automaker’s Chapter 11 bankruptcy was not.
It should be. The Valukas report, and the human toll left by the faulty ignition switches, are large windows into what one GM executive called “the dark aspects of GM culture” — the silos, the arrogant indifference, the chronic lack of accountability. In her testimony, Barra is more likely to reprise her stark appraisal of GM’s shortcomings and her steps so far to address them than she is to even attempt to soften her assessment for a national audience less invested in the company’s internal machinations.
“It’s an ‘it stops here’ mentality,” said a source familiar with Barra’s preparation for her congressional testimony. “It’s real no-nonsense. It’s an absolute two-by-four across the company’s culture. You’re going to get more of that on Wednesday.”
Saying so and doing so, of course, are two different things. In her first round of testimony, Barra overplayed the “New GM” card by trying to draw too much distinction where, the Valukas report found, there really isn’t one. Accordingly, she’s more likely to use the congressional appearance to detail specific steps GM is taking to address the dysfunction and lack of accountability.
That not only includes moves already taken — the firings and disciplinary actions, the appointment of a new safety czar, the engagement of top executives in recall decisions and lower-level employees in “safety first” initiatives — but also a system to ensure the Valukas recommendations are implemented and tracked.
But it’s only a start. Like its hometown, GM is burdened by legitimate suspicions it cannot change, cannot slay the demons of its past to become a functioning member of corporate America not wedded to the worst habits of a golden era now long gone. Switchgate, despite all the New GM rhetoric, only reinforces suspicions compounded by the fact that most of Barra’s leadership team are products of Old GM.
Managing the path back to respectability transcends the new metal in showrooms, and any New GM will be demonstrated by what it actually does. It’s Job One for Barra, whom her predecessor, Dan Akerson, touted for her ability to “drive change” in a company still badly in need of it. He got that part right.
Barra’s largest club, to the extent she’s willing to use it, is the unmistakable evidence of GM’s failure. Look to its downward spiral to bankruptcy, its long record of overpromising and underdelivering, its stifling bureaucracy populated by company men too often marking time. And to its deadly ignition-switch scandal.
Yes, what matters now — for the victims and their families, for GM’s employees and shareholders, for Barra’s tenure as CEO — is what the company does and how it does it. The rest, Washington grandstanding included, is just noise.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays.