Bloomberg News

GM Appoints Vehicle Safety Chief as Scrutiny Intensifies

March 18, 2014

Mary Barra

Mary Barra, chief executive officer of General Motors Co. Photographer: Andrew Harrer/Bloomberg

General Motors Co. (GM:US) Chief Executive Officer Mary Barra today created a new global vehicle safety position and promoted a 40-year engineering executive to run it as scrutiny intensifies on a vehicle flaw linked to 12 deaths.

The creation of the position follows remarks yesterday by Barra, who said the company mishandled complaints about the safety of small cars developed more than a decade ago. GM is racing to minimize damage to its reputation after announcing plans to recall more than 3 million vehicles already this year and apologizing for almost half of them.

The pressure is on Barra to say what went wrong, and who was responsible in the global recall of 1.6 million small cars and to convince investors and regulators that it won’t happen again. She has been speeding up ongoing recall probes and making direct appeals to employees while communicating to consumers that the automaker is sorry and will change.

Jeff Boyer, who joined GM in 1974 as a co-op student, will have global responsibility for identifying and resolving product-safety issues, GM said in a statement. The automaker faces four separate investigations related to the recall of Chevrolet, Pontiac and Saturn models with faulty ignition switches and has launched its own internal probe.

“Jeff’s appointment provides direct and ongoing access to GM leadership and the board of directors on critical customer safety issues,” Barra said in the statement.

‘Hits Home’

In addition to an investigation by the National Highway Traffic Safety Administration, GM faces hearings in the U.S. House and Senate. GM also is the focus of a Department of Justice probe, people familiar with that matter have said.

GM employees are meeting in Washington today with congressional staff members, people with knowledge of the meetings said.

The House Committee on Energy and Commerce called the meeting to discuss GM’s admission that it knew of the flaws for more than a decade before recalling six U.S. models, said the people, who asked not to be identified because the talks are private.

“Something went wrong with our process in this instance and terrible things happened,” Barra said in a videotaped message to employees on the company website yesterday. “As a member of the GM family and as a mom with a family of my own, this really hits home for me. We have apologized. But that is just one step in the journey to resolve this.”

Early Development

GM discovered ignition-switch problems in 2001 while developing the Saturn Ion small car and thought it had addressed them before the model went into production, the Detroit-based company told regulators last week. The Ion, Cobalt and other small cars were recalled in two waves last month, more than a dozen years later.

The switches can slip out of the run position if bumped or moved by a heavy key ring, causing airbags to fail to deploy in a crash.

Barra yesterday recalled an additional 1.76 million vehicles globally, including 1.55 million in the U.S., as part of an effort to speed up ongoing recall investigations and take action more quickly, she said in the video. The two recalls combined will add $300 million in costs to the first quarter, GM said.

GM rose (GM:US) 1 percent to $34.96 at 10 a.m. New York time. The shares slipped 2.6 percent from Feb. 12, the day before the first ignition recalls, through yesterday.

Boyer Background

Boyer, 58, will report to John Calabrese, GM vice president of Global Vehicle Engineering and become a member of Global Product Development staff, led by Mark Reuss, executive vice president, Global Product Development, Purchasing and Supply Chain.

Boyer has served as director of Engineering Operations and Systems Development since 2001. Previously, he was executive director of Global Interior Engineering and Safety Performance where he was responsible for the performance and certification of GM vehicle safety and crashworthiness.

“If there are any obstacles in his way, Jeff has the authority to clear them,” Barra said in the statement. “If he needs any additional resources, he will get them.”

To contact the reporter on this story: Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net

To contact the editors responsible for this story: Jamie Butters at jbutters@bloomberg.net Niamh Ring


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