The last time Congress convened hearings on an automotive safety scandal, during the early 2010 furor over sudden unintended acceleration in Toyotas, the crucial takeaway was how little members of Congress understood cars or the car business. This week, when General Motors Chief Executive Officer Mary Barra testified before committees about her company's safety scandal, the major impression was of how little she seemed to know about her own business.
Again and again, Barra denied knowing "anything about anything," as a clearly exasperated Senator Barbara Boxer characterized it. Claire McCaskill, who heads the Senate Subcommittee on Consumer Protection, Product Safety and Insurance, eventually requested that Barra return "when you can answer questions."
Although representatives from both houses showed deep frustration at Barra's "name, rank and serial number" approach to their questions, the hearings clearly yielded important evidence ... most notably that of Barra's reticence itself. Her experience within GM, her credentials as a "car gal," were heavily emphasized by GM's public-relations experts in the months leading up to the recall announcement. Now, just when her deep knowledge of GM might have been a huge asset, she acted as if she wore blinders for the last 30 years. Considering Barra is just the latest in a long line of GM CEOs who have noisily touted their "turnarounds" of the automaker, this was not a reassuring development.
But Barra's lack of answers was not entirely surprising. Within the broader cultural issues surrounding GM's approach to consumer safety and accountability lie two very specific quality control problems that fundamentally undercut her ability to reassure customers. First, GM took delivery of a part that was not up to its specifications, and second, changes to that part were not accompanied by changes to the part number. Between these two fundamental breaches of basic quality management, it's not clear how GM can reliably assure anyone of anything. The fact that Barra couldn't answer congressional questions is every bit as terrifying to consumers as if she had pleaded the Fifth Amendment.
Barra's defense has been twofold: That the ignition switch situation is "extraordinary"; and that it was the product of the Old GM's "cost-culture." The ignition problem may indeed prove to be "extraordinary," but Barra can hardly know that with any certainty, given that she doesn't seem to know how basic quality control was circumvented in the ignition switch case. For all she (or anyone else) knows, there could be many more of these problems lurking in the vastness of GM. Insisting she knows for a certainty that the ignition defect was "extraordinary" does not help her credibility,
Barra's flat-out assertion that "Today's GM" simply does not consider cost when any safety issue is being examined is even more problematic. On a basic level, this simply can't be true for any automaker, every one of which balances cost and safety at some point in every design. But it also flies in the face of the facts: the trial involving the death of Brooke Melton, a 29-year-old Georgia pediatric nurse who died in March 2010 after her 2005 Chevy Cobalt lost power, brought the ignition problem to GM's attention early last year, yet the company's CEO didn't find out about it for nine more months. More damning still was the revelation of an e-mail sent last year to GM by the head of defect investigations at the National Highway Traffic Safety Administration, which stated, "The general perception is that General Motors is slow to communicate, slow to act, and at times requires additional efforts from ODI that we do not feel is necessary with some of your peers." Within the last 18 months, the New GM has given consumers ample cause to be wary of its commitment to their safety.
It's not unlikely that, in preparing for these hearings, Barra and GM assumed things would follow the pattern set by the Toyota hearings: a witch hunt that quickly choked on its own overreach. Instead, GM finds itself in a situation that more closely resembles the last time it sent executives to a high-profile congressional hearing: when CEO Rick Wagoner went to beg for bailout money in late 2008. Barra may have avoided the media-baiting sin of traveling to Washington in a private jet, but her inability to explain or take accountability for her company's fundamental problems shows just how little GM's executive culture has changed in the intervening period. Now, as then, Congress is not satisfied with GM's lack of real answers, and its CEO is coming away from its Capitol Hill drubbing with the promise of more hearings to come.
(Edward Niedermeyer, an auto-industry consultant and former editor of the blog The Truth About Cars, is a contributor to the Ticker. Follow him on Twitter at @Tweetermeyer.)
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
To contact the author on this story:
Edward Niedermeyer at firstname.lastname@example.org
To contact the editor on this story:
Toby Harshaw at email@example.com