GM CEO vows further changes ahead of federal monitoring
Washington — General Motors CEO Mary Barra said she is still trying to change the culture of the Detroit automaker more than 18 months after she took the reins of the company.
“Clearly we have more work to do,” Barra said at Fortune’s Most Powerful Women forum Thursday.
Barra, who was ranked by Fortune Magazine as the most powerful woman in corporate America added: “We are working to change the culture at General Motors and I think we’re well on our way on that journey.”
Addressing the huge emissions scandal Volkswagen AG is facing Barra said “I don’t think you’ll find something similar to that emerging from GM.” .
GM will soon be under the oversight of a federal monitor who will make assessments about the company and its safety culture and then propose changes. GM agreed to the federal oversight for three years as part of a $900 million settlement of the government’s investigation into GM’s delayed recall of 2.6 million vehicles linked to at least 124 deaths and 275 injuries. A monitor could be appointed as early as later this month.
A monitor at Toyota has been in place for more than a year as part of a $1.2 billion settlement with federal prosecutors. The monitor — former New York U.S. Attorney David Kelley — has attended lots of company meetings, said Toyota North America CEO Jim Lentz, and has been making recommendations on changes, which Toyota will implement.
Last month in New York U.S. District Judge Alison J. Nathan allowed the GM consent agreement to take effect immediately after she granted the government’s request to officially put the case on hold for three years. That will allow prosecutors to pursue the case if GM doesn’t abide by the agreement. GM was charged with wire fraud and misleading regulators.
At Tuesday’s forum, retired Fortune editor Carol Loomis, who interviewed Barra, said that “the streets are littered with CEOs who tried to change the culture at GM.”
Barra said GM is boosting margins on its vehicles.
“We’re making the tough decisions,” Barra said. “We don’t have to be the largest. We have to be the highest quality. ... We’re improving the fundamentals of the business.”
GM board member Patricia Russo, who was at the forum, told The Detroit News that GM still needs more work to do to. “I think Mary’s done a great job managing through (the ignition switch crisis),” Russo said, adding that the board was pleased with the settlement. “There’s obviously more work to be done, which Mary is leading.”
Russo said GM has made diversity a big focus.
“GM values diversity,” Russo said. “When diversity is valued in the broadest sense, you get the best people — and there’s a lot of women in the workforce. I wish there was something more rocket science than that.”
Last month’s Justice Department settlement ended the criminal investigation into the automaker’s delayed recall for defective ignition switches. The switches in Chevrolet Cobalts, Saturn Ions and some other older GM cars can allow the key to inadvertently turn off the engine, disabling power steering and air bags. Some within the company knew of the problem for as long as 10 years before the cars finally were called back.
GM’s total cost to date for its delayed recall is about $2.35 billion when including the expected payout of a compensation program for those hurt or killed in defective cars. Barra told reporters last month there was no way to estimate GM’s exposure to fines and settlements in ongoing litigation, and with investigations by the Securities and Exchange Commission, Federal Trade Commission, state attorneys general and Canadian authorities.