Mary Barra, General Motors’ chief executive, is struggling to contain the fallout from the revelation that the carmaker failed for more than a decade to reveal concerns about the safety of ignition switches on some of its compact cars.
GM this week announced a slew of new recalls and more than doubled its expected charge this quarter to $750m. On Tuesday, Ms Barra and David Friedman, acting administrator of the National Highway Traffic Safety Administration, appear before the US House of Representatives’ energy and commerce committee to explain what went wrong and why.
Robert Wright and Shannon Bond report from New York
General Motors CEO Mary Barra
General Motors’ widening of the recalls of US cars and trucks for safety and other defects is a challenge for Mary Barra, its new chief executive, as she prepares to testify to Congress this week. Read more
Straight-talking Karl-Thomas Neumann, chief executive of Opel, has given the world of reputation management a useful new metaphor for brand-blight: the “red elephant”.
At the Geneva motor show, he told the FT that the General Motors-owned German marque had suffered from a perception problem:
There was a red elephant standing beside the car that nobody talked about which says: ‘You can’t buy me because I’m an Opel’ … and we are addressing this now.
Not welcome in the showroom (image: Dreamstime)
Whether or not Mr Neumann has mixed up “elephants in the room” and “red flags”, I find the image compelling enough to be worth spreading.
Plenty of companies persist in assuming that a brand’s historic reputation will sustain it, without tackling the scarlet pachyderm that may be frightening off customers. Antidotes include: 1) making such a noise about the brand that it drowns out the trumpeting of the creature standing alongside; 2) improving the quality of the product so that it is no longer dwarfed by the public (mis)perception about it. Read more
Aston Martin recall gives an insight into the supply chains of even luxury carmakers (Bloomberg)
Aston Martin’s recall of most of the cars it has built in the past six years is damaging to the company, but even more damaging for the reputation of parts suppliers in the Pearl River Delta in China. Read more
If you can avoid it, never get into a position where Sergio Marchionne can force you to play poker. That applies literally, as Fiat executives who fly on its (rented) corporate jet know, and metaphorically, as other companies have discovered in the past decade.
Mustang Mulally: the Ford CEO, in a 2015 Ford Mustang (Getty Images)
Alan Mulally has a reputation for being decisive, so his declaration that he has “no plans to do anything other than serve Ford” – crushing speculation that he could leave to run Microsoft – should probably be taken at face value.
But Ford’s chief executive has wavered over big jobs before – notably when the carmaker was trying to lure him to Dearborn from Boeing in 2006. Read more
GM's off – and Barra's driving (Bill Pugliano/Getty Images)
Of two immediately obvious facts about Mary Barra, chief executive elect at General Motors, the more interesting is not that she is a woman but that she is a company “lifer”.
To my mind, GM looks as though it is signalling that it has turned the corner following the trauma of government bailout, just as Citigroup did when it appointed career insider Michael Corbat as chief executive last year. Read more
In 2010, seven managers from PSA Peugeot Citroën and five from Chang’an Automobile met in Shenzhen, southern China, to lay the groundwork for a new car factory. Three years later, Capsa, a 50-50 joint venture between the French and Chinese companies, is in the final stages of preparing a 1m square metre plant for the September launch of Chinese-made premium cars under the DS brand. “Because we were beginning from a blank sheet, people wanted to make it as perfect as possible,” says Gilles Boussac, Capsa’s president, between meetings with his team of mostly Chinese managers. “So often in China, if you’re trying to rework or improve something, it takes years to achieve.”
French industry minister Arnaud Montebourg told: "How stupid do you think we are?" Getty Images
French Socialists and American chief executives make awkward bedfellows at the best of times. Just how awkward is evident from the extraordinary letter Maurice “Morry” M. Taylor – nicknamed “The Grizz” for his uncompromising negotiating style – sent to Arnaud Montebourg, France’s industry minister.
“How stupid do you think we are?” was Mr Taylor’s response to Mr Montebourg’s attempt to find out if Titan, the tyremaker Mr Taylor heads, would take over part of Goodyear’s factory in Amiens. Earlier efforts by Goodyear to forge a deal with Titan foundered on union opposition, which has not endeared French workers to the Titan CEO, who claims they “get paid high wages but work only three hours”. Read more
When David Cameron flew to Davos last week to tell companies that reduce their tax bills by dividing activities among countries to “wake up and smell the coffee”, his target was clear. Starbucks now faces a consumer boycott and has been publicly accused of acting unethically.
The news that Avis Budget is buying Zipcar for $500m evokes mixed feelings in me for two reasons.
One is that I was a regular Zipcar user for seven years in New York, where we did not own a car. On returning to sprawling London, I have just succumbed and bought a car again, thus reducing my Zipcar use. Read more
Once upon a time, companies simply made new products and sold them. In due course, they made them, advertised them to buyers and then sold them. Now, publicity frequently comes before the sale, the production and sometimes even the design of the item, with what modern marketers like to call a “pre-announcement”.
When a senior executive gets the boot from a company, it is usually covered up with some pablum about seeking new opportunities. So General Motors’ statement about the abrupt departure of Joel Ewanick as its head of global marketing is remarkable.
The FT reported it in this way:
“The resignation is disappointing but he failed to meet the expectations that a company has of an employee,” Greg Martin, a GM spokesman, said in an interview. He declined to give further details.
“Day by day Volkswagen… appears less like a public company, and more like a complex oligarchy.” That’s how The Economist began a critique of the German carmaker’s flawed corporate governance – in December 2005.
Not much has changed since, as the latest developments in Wolfsburg suggest. In spite of periodic protests about governance, Ferdinand Piëch, VW’s chairman, has reinforced his hold over the group and is expected to seek another five-year term in the chair. The latest news is that his wife, Ursula, will stand for nomination to the board. This may be, as the FT wrote on Sunday, part of “a fairly well-established tradition of spouses taking up powerful positions at German companies”, citing the board positions held by Friede Springer at Axel Springer, and Liz Mohn, at Bertelsmann. But to anybody outside this tradition of family-controlled companies, it looks distinctly odd. As Dow Jones pointed out in its account, “there are no reports…. that would suggest she has any high-profile corporate management experience“. Read more
The news that sales of Rolls-Royce cars in China have overtaken those in the US, and that China now accounts for 31 per cent of Rolls-Royce’s sales, makes me wonder if we have reached a turning point for luxury design.
That sprung to mind when I saw a BMW M5 driving along a parkway in the US the other day. Although this is subjective, my first reaction to looking at its rear view and tail lights was that it would have looked more at home on the Bund in Shanghai. Read more
The pun proved irresistible. “Mystery Ends, Mistry Begins”, ran the headline in India’s Economic Times on the appointment last week of Cyrus Mistry to succeed Ratan Tata at the head of the eponymous tea-to-steel holding company. If the succession was a mystery, it looked to have a pretty feeble final twist.
It’s a cruel coincidence that the latest death knell for Saab comes within days of the latest extension of car guy Bob Lutz’s lease on life.
On Thursday, a Swedish court rejected the carmaker’s attempt to seek protection from its creditors, pushing a decision on potential insolvency into the hands of suppliers and employees awaiting payment for materials and labour. Saab is appealing, but the obituaries for the group – now selling well under 100,000 units annually – are already being written. Read more
The demise of Norwegian electric car pioneer Think Global will drain some of the energy from advocates of electric vehicles.
They should recharge by shifting their view from blueprints of cars and studying instead more comprehensive plans that aim to combine vehicle, infrastructure and services. Read more
General Motors’ plan to give “a higher profile” to its Chevrolet brand makes lots of sense, given that Chevrolet is the equivalent of the Toyota brand – a volume marque around which other brands are arrayed. But why stop there?
It is increasingly odd for GM, which has been attacking its brand proliferation in the US, to have different brands around the world for its volume cars – Vauxhall in the UK, Opel in Germany and Holden in Australia.
The company has already taken the logical step of losing the GM Daewoo name in South Korea and adopting Chevrolet instead. Why not bite the bullet and do that same in other countries? Read more
It is tempting to dismiss the Renault scandal, which has humiliated Carlos Ghosn, the company’s chief executive, after he admitted this week that it had falsely accused three former executives of espionage, as a corporate Dreyfus affair.