THE GM RECALL

Akerson says GM's problems were worse than execs thought

Akerson: "I think we all -- including the new and the old part of the management team -- didn't fully realize how deep some of the problems ran."
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Former General Motors CEO Dan Akerson said the automaker’s delayed ignition switch recall was indicative of a flawed corporate culture that was worse than he and other executives had originally recognized.

In an interview last week with The Detroit News that was published today, Akerson reflected on the fallout from the recall and how current CEO Mary Barra has handled the crisis.

“I think the company needed a lot of change, and I said a lot of that culture wasn’t where we wanted it to be,” he said in the interview, held after a screening in Washington, D.C., of a GM-assisted documentary on two military veterans.

The former CEO said the defective ignition switch, which GM has linked to 54 crashes and 13 deaths and was responsible for the recall of 2.6 million vehicles, was a “clarion call” for a values shift within the company.

“I think we all -- including the new and the old part of the management team -- didn’t fully realize how deep some of the problems ran,” he said.

Akerson, 65, left as CEO in January, earlier than expected, to care for his wife, who has cancer. He was a managing director at private equity firm Carlyle Group when the U.S. Treasury appointed him to GM’s board in 2009. In 2010, he became CEO.

As an outsider running the automaker, Akerson told the News that Congress may have given him more of the benefit of the doubt if he was still at the helm when the recall was announced.

“I think it would have been easier for me to defend the company, because quite frankly I thought Mary got treated a bit unfairly by virtue of, ‘You’ve been with the company 30 years. Why didn’t you change things?’” he said.

Akerson faced Congress in an investigation of the Chevrolet Volt in 2012 for battery fires, and opted to dismiss some executives for ethical reasons during his tenure. He said if he were to testify for the ignition switch recall, he would have said, “I’ve had a raft of problems every year, and we addressed them straight up and don’t blink and we try to solve them.”

Despite congressional scrutiny, however, Akerson said Barra has weathered the recall storm well.

“I think they formulated a plan of recovery and I think that’s something to be proud of,” he said. “I can’t think of a better leader than Mary.”

Barra dismissed 15 GM employees over the delayed recall, and for now has set aside $400 million for victim compensation. The automaker has recalled a total of 28.8 million vehicles in 60 campaigns, and has allotted $2.5 billion for the recalls.

At a reception Friday for an MBA student program that works to promote small businesses, Barra told reporters that GM has been successful at staying on plan.

“This is a marathon,” she said. “We are going to do the right thing whether it’s the easy thing or hard thing to do, and we’re confident that it’s going to pay off.”

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