Don't Judge the Recalls, Judge Their Handling
by, 07-06-2014 at 12:57 PM (112864 Views)
July 6, 2014
By: Nick Saporito
We're just halfway through 2014 and General Motors has recalled over 25 million vehicles. Nearly every week the company is on the evening news for another product recall; all stemming from their negligence toward an ignition switch back in 2001. In keeping with the tone of justifying everyone's existence, there's been dog and pony shows in DC over the matter, and of course RenCen is trumpeting the "we're a new GM" hoopla to temper consumer sentiment.
Despite the antics toward the whole situation, GM really shouldn't be judged for the actual recalls - regardless of how high in volume they climb. Instead, the core concern is deeper than the surface of the headlines.
The concern behind the ignition recall and others is that New GM has existed for five years (five years this week, in fact). For the last five years we've been told thousands of times that New GM is focused on the consumer and out to "Design, build and sell the world's best vehicles."
To an extent, I suppose we should give GM some credit here. It takes bravery to recall the amount of vehicles GM has recalled, both because of the corporate expense (they're at $2.5 Billion for the year in recall expense) and because of the impact on consumer sentiment. In fact, I'd argue GM should be judged in how they are handling this crisis, and for that they deserve a good grade. They're taking no chances with product safety and they've literally put their money where they're mouth is on the matter.
But I'm going to ask a really simple, perhaps naive question: if New GM is such a reformed organization, why has it taken five years for these recalls (some on vehicles as old as 1997 products) to come to the surface?
There's vast evidence that the company was aware of the ignition situation multiple times over the last 13 years, as suggested by Anton Valukas' investigation into the matter. In fact, Valukas goes so far as to say there was no sense of urgency from GM as recently as 2013 on the matter.
My question is merely rhetorical. As someone who has followed GM for nearly 12 years, often inside the company, I'm not ignorant to the fact that New GM still has a whole lot of Old GM inside it. The question really becomes how long does GM get a pass for changing when it really isn't?
Is the recall of 25 million vehicles on a $2.5 Billion financial charge THE singular ignition the company needs to engage in true, fundamental change?
Only the employees of GM can answer that question. One thing is certain: GM shouldn't be judged for the amount of recalls, they should be judged in their handling of them. Their handling of them includes the HUGE, unanswered question of why it took five years for all of this to happen at a New GM.
The road to redemption is a long one, and it appears GM will be walking this road for decades to come.