General Motors is clearly now in a crisis which could be far worse than bankruptcy was five years ago – one that may threaten the very survival of what once was the world’s biggest corporation.
Gregg Harper, an obscure Republican congressman from Mississippi, spoke for America yesterday, when he and other congressmen were grilling GM’s new CEO.
“We don’t trust your company right now,” he told Mary Barra, who endured more than two hours of hostile questioning from the House Oversight and Investigations subcommittee.
What Harper thinks is what millions of Americans think.
Many of them stopped buying GM products long ago, tired of inferior quality and of being lied to by sales and service personnel.
They are like a man I know who bought a top-of-the line Buick in 1986, only to find the car afflicted with electrical problems the company couldn’t or wouldn’t fix. He traded it for a Honda Accord, and says he would never touch a General Motors car again.
He’s far from alone.
Experiences like that are a big part of the reason that a company that once had a 54% market share ended up bankrupt, and today has less than a fifth of the market.
In recent weeks we have learned that some General Motors cars had a faulty ignition switch that some company officials knew about for years, a problem that caused at least 13 deaths.
Investigators also have a memo written by some anonymous GM engineer that says fixing the problem would not be cost-effective. It says, “none of the solutions represents an acceptable business case.”
Yesterday, filmmaker Michael Moore actually suggested that whoever was responsible for this be taken out of General Motors, “by the U.S. Army if need be,” and executed.
You might call that a bit hysterical.
Still, it won’t take executions or firing squads to kill General Motors. All it will take is people refusing to buy their cars, and it is hard to argue that buying a Chevy Cobalt is a rational choice today.
This company’s only hope may be Mary Barra, who I thought handled herself very well. Even Michael Moore said, “Only now has the truth come out, and my guess is that it has to do with the fact that a mother now runs General Motors.”
I’m not sure that’s right – but I am sure that this company is extremely fortunate that it had a warm and empathetic woman up there yesterday, not the sort of arrogantly wooden executive on display six years ago.
Barra told Congress and the nation that today’s GM is not the old GM, that it is focused on customer safety, not cost, and that it will do everything it can to make this right.
That will cost many millions.
GM may not be legally liable for these deaths, since the defect happened before its bankruptcy and rebirth. Barra knows they have to pay up anyway.
This is her defining moment. If General Motors is alive and profitable four years from now, I think it will be because this company is lucky enough to have a CEO who isn’t afraid to cry.
Whatever your taste in cars, our economy may depend on whether she succeeds.