July 28, 2014 at 11:05 am

Akerson: 'We all' misread problems in GM's recall crisis

Ex-CEO dubs recall crisis 'clarion call' for change at automaker

'I said a lot of that culture wasn't where we wanted it to be,' said former president and CEO Dan Akerson said of GM. (Daniel Mears / The Detroit News)

Washington— Former General Motors Chairman and CEO Dan Akerson says the automaker’s recent ignition switch recall crisis shows that problems with GM’s corporate culture were far more serious than executives realized.

Akerson, who stepped down in January ahead of schedule to help care for his wife, Karin, who is fighting cancer, told The Detroit News in an exclusive interview the delayed recall of 2.59 million cars now linked to at least 13 deaths will be a “clarion call” for change at GM and won’t be forgotten for decades.

“I think we all — including the new and the old part of the management team — didn’t fully realize how deep some of the problems ran,” said Akerson, a private equity executive who joined GM’s board in 2009 as an appointee of the U.S. Treasury and was named CEO in 2010. “I think we built a good foundation. I think the company needed a lot of change, and I said a lot of that culture wasn’t where we wanted it to be.”

He repeatedly praised GM CEO Mary Barra, tapped for the job by GM’s board and Akerson in December, for steering the company as it faces its greatest auto safety crisis in years. Some in the company knew of problems with the ignition switches in Chevrolet Cobalts, Saturn Ions and other cars for more than a decade before the cars finally were recalled in February. The ignition key can inadvertently turn off the engine, which disables power steering, power brakes and air bags.

Akerson said because he was a relative newcomer at GM, he may have gotten fairer treatment from Congress if he still had been CEO when the ignition switch crisis came to light.

“I think it would have been easier for me to defend the company, because quite frankly I thought Mary got treated a bit unfairly by virtue of, ‘You’ve been with the company 30 years. Why didn’t you change things?’ ” Akerson said.

“I could have said, ‘Hey, look, we had to change 30 things. This one dates back to eight, 10 years ago.’ It’s a little unfair, but life isn’t fair, and you own the problem.”

Known at GM as a no-nonsense CEO, he dismissed several executives for ethical questions, and reassigned or dismissed others who underperformed. He faced a House panel investigating the Chevrolet Volt in 2012.

He said had he testified before Congress on the ignition switch recalls, he would have said: “I’ve been here 3˝ years. I’ve had a raft of problems every year, and we addressed them straight up and don’t blink and we try to solve them.”

He praised Barra and the management team at GM that he largely appointed: “I was proud that the team faced the facts, brutal as they were, and I think they formulated a plan of recovery and I think that’s something to be proud of. I can’t think of a better leader than Mary.”

'Hurtful' suggestions

Akerson reiterated comments he made in an interview in May with Forbes that he, the board and Barra didn’t know of the ignition switch defect before February, saying, “When I first heard about (the problems), I was just aghast.”

He told Forbes that Barra “didn’t know about it. I bet my life on it.”

Akerson told The News he had been advised not to talk about what Barra knew for the Forbes interview, pending completion of GM’s internal investigation led by former U.S. Attorney Anton Valukas. But he said he felt so strongly about Barra and her integrity, that he made the comments anyway.

Akerson said speculation that GM managers purposely hid information from Barra — or that he left her with the mess — was ridiculous. Internet chatter implying that GM could soften criticism of its mishandling of the recall by promoting the first woman to lead an automaker, Akerson said, only shows that “fools can say anything.”

“We have four women on the board. You’d have to be so cynical. You’d have to be a terrible person to even (think it).” He called the suggestions “hurtful.”

Akerson said he regularly talks to Barra, and until recently had remained a consultant to the automaker. He has kept a close eye on developments, including the four congressional hearings. “By the time she had her fourth turn at it, I thought she handled herself extraordinarily well. She did pretty damn good.”

The automaker paid a record-setting $35 million fine to the National Highway Traffic Safety Administration and faces investigations by the Justice Department, the Securities and Exchange Commission and 45 state attorneys general.

GM North America has called back a record 28.77 million vehicles this year in 60 campaigns — more than the entire auto industry’s 22 million vehicles recalled in 2013. GM has set aside $2.5 billion to pay for callbacks.

The internal investigation found a “pattern of incompetence and neglect” was the root cause of the recall delay. Barra said Friday that GM has changed its ways. “If we see a safety issue, we’re going to take action ...,” she said.

Akerson said part of the problem is that in any big company, there will be people who aren’t doing their jobs. Barra fired 15 — including a company vice president and many senior lawyers — and she disciplined five others.

GM has more than doubled the number of product investigators it has reviewing safety issues, adding about 35 positions.

Lift throws you 'curveballs'

Akerson, a managing director at private equity firm Carlyle Group before he became GM’s CEO, rejoined Carlyle as vice chairman and special adviser to the board of directors in March. Now semiretired, he focuses most of his attention on his wife. He ended his contract as a special adviser to GM on June 30.

The U.S. Navy veteran spoke Wednesday at a screening of a documentary film GM helped underwrite. It follows two combat-wounded veterans and Michigan Technological University engineering students who design and build a better handcycle for the vets to compete in races. GM provided assistance.

“General Motors deserves no praise. We did what we should do,” Akerson said. “It’s our job. We’re part of the American landscape. ... It’s testimony to their strength and perseverance that they want to do something with their lives.”

He noted one soldier said it would be easy to sit around and feel sorry for himself, offering a message that applies to business and life.

“You can’t do that. Life’s going to throw you curveballs. I can say that. I’m 65,” Akerson said. “You have to adjust — and life isn’t always fair.”

Detroit News Staff Writer Melissa Burden contributed.