The Great Debate UK
from The Great Debate:
General Motors chief executive officer Mary Barra on Tuesday and Wednesday will appear before Congress to explain why GM took more than a decade to issue a recall on a faulty ignition switch, which led to at least 13 deaths. The hearings will be a proving ground for Barra, who became CEO in December 2013, as well as for GM’s new chairman, Theodore “Tim” Solso, and the entire GM board.
Congress will question why Barra’s most recent predecessors didn’t catch the defective switch. A likely explanation is that the board and senior management were so focused on digging GM out of bankruptcy that they weren’t paying attention to what else may have been going amiss.
Of course, that excuse is insufficient, since the company needs to do both things simultaneously: avoid bankruptcy, while building safe cars. Barra, Solso and the board must convince Congress, the markets and consumers that they have identified why the faulty ignition switch went undiscovered for so long, and that they can be trusted to prevent a similar crisis from happening again.
At GM, the board and executive team must look back at the last decade and determine what went wrong -- both within GM, and also in the relationship between the board and senior management. As a board director I can say this is not always a comfortable process, but it is vital that every board director understand the historical dynamic between the management and the board. Most of the current GM board members joined the board after 2009, but they can learn valuable lessons about why the recall did not occur earlier, what previous boards should have been doing and why the board is only now finding out about the recall.
from The Great Debate:
-- Edward Niedermeyer is the editor-in-chief of The Truth About Cars. The views expressed are his own. --
(Paragraph 7 corrected on February 10.)
Life rarely offers easy answers to important decisions, but up until a few weeks ago, it seemed that new cars buyers simply couldn't go wrong buying a Toyota. For decades, the Japanese automaker had built up an unmatched reputation for quality and reliability, on its way to becoming the best-selling automaker in the U.S and the top car producer worldwide. A Camry might not have been a particularly glamorous or exciting choice of vehicles, but consumers could buy one without doing a lick of research, and expect it to run reliably and efficiently for years. At least they could until a flurry of defects and recalls suddenly brought Toyota's untouchable reputation back down to earth.