GM boss: 'Personally' rue car deaths

In this file photo, General Motors CEO Mary Barra addresses the media during a roundtable meeting with journalists in Detroit.
In this file photo, General Motors CEO Mary Barra addresses the media during a roundtable meeting with journalists in Detroit.

General Motors Co. Chief Executive Officer Mary Barra, speaking to reporters Tuesday for the first time about the recall of 1.6 million compact cars, apologized for the “loss of life” and said there will be “no sacred cows” in the investigation.

“I want to start by saying again how sorry I am personally and how sorry General Motors is for what has happened,” Barra said. “Clearly lives have been lost and families are affected, and that is very serious. We want to just extend our deep condolences for everyone’s losses.”

Barra said it “took too long” to recall cars that stalled and killed 12 people. Earlier Tuesday, she appointed a new safety chief to ensure defects get a more timely resolution. “Our goal is that something like this will never happen again.”

Barra, speaking to reporters at the company’s Detroit headquarters, said she first learned about an analysis of the stalling cars in December, weeks before she became CEO, and that she was informed of the decision to recall cars on Jan. 31. GM’s board was notified after the recall was filed. In the future, directors will be informed sooner, Barra said.

What Barra, 52, and others at GM knew — and when — is the goal of the internal investigation into why the automaker took so long to recall 1.6 million Cobalts and other small cars. The replacement of ignition switches was announced last month, years after customers started complaining that the autos could switch off if bumped or driven with a heavy key chain.

The largest U.S. automaker has determined which models used the faulty switch, said Mark Reuss, GM’s executive vice president for global development. Owners can drive loaner vehicles at GM’s expense until their cars are fixed, he said.

The company hasn’t contacted families of those killed in its cars, Barra said, adding that it may do so after concluding its internal investigation, which may take a few months. She declined to speculate on what investigators might find.

Barra said a key step in fixing the GM system for recalls was her announcement Tuesday that she has created a new global vehicle safety position and promoted a 40-year engineering executive to run it.

Jeff Boyer, who joined GM in 1974 as a co-op student, or intern, will have responsibility for identifying and resolving product-safety issues, Barra said. She said she’s known Boyer since the early 1980s and expects him to change the process.

“Jeff is a passionate safety zealot,” Reuss told reporters.

In addition to an investigation by the National Highway Traffic Safety Administration, GM faces hearings in the U.S. House and Senate. GM also is the focus of a Justice Department investigation, people familiar with that matter have said.

GM employees are meeting with congressional staff members, Barra said. In Canada, the opposition New Democratic Party has asked Transport Minister Lisa Raitt to testify about the government’s investigation into the defects behind the recall.

Aside from disavowing knowledge of the problem, Barra didn’t say much, Matt Stover, an analyst with Guggenheim Securities in Boston, said in a telephone interview.

“Everything else was right from the playbook,” he said. “She handled herself well, but I don’t think she really told us anything. But you have to get out and talk.”

An apology by a CEO isn’t uncommon. In 2009, after Toyota Motor Corp. announced plans for a recall because of sticky pedals and misshapen floor mats linked to sudden acceleration, Toyota CEO Akio Toyoda apologized to the family of Mark Saylor, a California Highway Patrol officer who was killed along with his wife, daughter and brother-in-law in a Lexus that sped out of control.

At GM, Barra’s job isn’t “on the line,” though how she handles this crisis will define her as CEO, said Brian Johnson, an auto analyst at Barclays in Chicago.

“This is the Tylenol moment for her, where the company is either seen as quickly and thoroughly addressing the issue or seen as dragging its feet and denying reality,” Johnson said in an interview. “She was kind of quiet the first week, but this week they seem to be stepping up.”

Shares of GM rose 54 cents to close Tuesday at $35.17.

Business on 03/19/2014

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