What GM's mea culpa could mean for the brand

General Motors CEO Mary Barra

General Motors CEO Mary Barra testifies before the Senate Commerce, Science and Transportation Committee on Capitol Hill, April 2, 2014 in Washington, DC. The committee heard testimony on a safety defect that's been linked to at least 13 deaths and has sparked a 2.6 million-vehicle recall. 

Mary Barra, the newly appointed CEO of General Motors spent another day on Capitol Hill, testifying before lawmakers about why it took GM a decade to recall millions of cars with defective ignition switches.

Barra apologized again today, but how well GM will weather public outcry is still a question.  The company’s success at selling cars after this crisis ends “depends on whether this is attributed to the old GM or the new GM” says David Vinjamuri, author of “Accidental Branding”.

Vinjamuri is impressed at how well Barra has handled the recall so far. He says Barra and GM showed they were serious when they brought on Kenneth Feinberg, the attorney known for his work with compensation funds. Feinberg worked with victims of 9/11 and the BP Oil Spill, for example.  

Bringing on Feinberg also shows General Motors is looking for a quick -- rather than inexpensive -- way of putting the recall behind them, and it seems likely they’ll pay the families of crash victims related to the recall.

It’s smart for GM to agree to a large payout early on, says Vinjamuri, because in the long run, they’ll make that money back only if American car-buyers learn to trust the company again.

About the author

David Gura is a reporter for Marketplace, based in the Washington, D.C. bureau.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...