Mary Barra faced members of the Senate yesterday in what was easily the most difficult day in Barra’s three month tenure as CEO of General Motors. With 2.6 million cars being recalled due to a defective ignition switch, Senate members pressed Barra over what she knew, and when she knew it. If you believe Barra, she is still gathering all the intel she can. What about Delphi – the company whom supplied the defective part. What did they know? It’s only a matter of time till Delphi, as well as other GM executives are called up to testify.
The defective ignition component would have only cost the company 57 cents per vehicle to replace. However in documents published in 2005 by GM, the company decided it was too expensive to implement a fix, and a lack of acceptable business case for doing so. Surely GM engineers knew this potential defect could have serious ramifications, but what did the supplier Delphi know? What about the National Highway Traffic Safety Administration(NHTSA), what did they know? NHTSA had raised red flags over airbag problems in these GM vehicles.
Mary Barra said GM has legal and moral obligations to the families of the victims. But she has not at this time clarified exactly what those are. Due to the 2009 bankruptcy, GM is shielded from having to pay accident victims for crashes that happened before it went chapter 11. But Barra has made it clear that GM intends to compensate the families of the victims.
Unfortunately the bean counter mentally of the past has come back to haunt GM, only this time at a cost of lost lives.