What GM’s mea culpa could mean for the brand

David Gura Apr 2, 2014
HTML EMBED:
COPY

What GM’s mea culpa could mean for the brand

David Gura Apr 2, 2014
HTML EMBED:
COPY

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.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.

$5/month special ending soon!

Don’t wait: there’s less than 24 hours left to get (almost) any Marketplace thank-you gift.