General Motors

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

 

John Gapper

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

General Motors and Malaysia Airlines are both in trouble but one is giving a lesson in how to handle a fatal crisis while the other is offering a masterclass in how not to. There is a glaring contrast in the behaviour, and ability to cope with public criticism, of Mary Barra, GM’s chief executive, and Ahmad Jauhari Yahya, the chief executive of Malaysia Airlines – although Ms Barra has a simpler task.

Andrew Hill

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

Andrew Hill

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.”

John Gapper

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.

 Read more

John Gapper

The travails of old media businesses are well-known but I’m starting to feel sympathy for advertisers and media buyers.

That sentiment was brought on by looking (in old media fashion) at the front of the print section of the New York Times today. The lead article is about Madison Avenue’s scepticism on whether Facebook is a good advertising medium and underneath that is a piece on Dish Network’s new ad-skipping digital video recorder.

Facebook’s advertisers have been struggling with whether display ads on the social network will produce results, with General Motors pulling its $10m Facebook ad budget ahead of the intial public offering.

Meanwhile, Dish has upset US television networks in the “upfront” season where they show off their next season wares to advertisers but producing a box that automatically skips all the commercials between network shows. Read more