General Motors CEO Mary Barra is taking her new mantra — we can and will our change our culture — to another Congressional hearing at 10 a.m. today. As difficult and disruptive as changing a brand’s image can be, overhauling the way a behemoth such as GM conducts its internal business is undoubtedly a much more challenging undertaking.
Barra’s prepared testimony before the U.S. House Committee on Energy & Commerce Subcommittee on Oversight and Investigations was posted to the GM investor relations website yesterday. After outlining eight specific actions the company is undertaking in response to the findings by former U.S. Attorney Anton Valukas in a company-funded investigation released earlier this month, Barra will state:
“I know some of you are wondering about my commitment to solve the deep underlying cultural problems uncovered in this report. The answer is I will not rest until these problems are resolved. As I told our employees, I am not afraid of the truth.
“And I am not going to accept business as usual at GM. It's time — in fact, it’s past time — to insist on total accountability and make sure that vital information is shared across all functions in our company… so we can unleash the full power of our 200,000 employees, our 21,000 dealers and our 23,000 suppliers.
A brief introduction to the prepared statement cautions, “As always, the spoken word is definitive.”
True. And one of the major problems with the culture at GM, apparently, is that no one was taking anything as “definitive.” In its June 6 story on the 315-page report by Valukas about the faulty ignition switch fiasco that brought GM’s cultural deficiencies into the open, a team of Wall Street Journal reporters pointed to a very telling paragraph:
“In the report, Ms. Barra was cited for a description of what she called the ‘GM Nod,’ or meetings where participants appeared to nod in agreement that action should be taken, then did nothing. Another official invoked the ‘GM Salute,’ or crossing arms and pointing toward other employees to indicate that ‘responsibility belongs to someone else, not me,’ the report said.
There is considerable skepticism about GM’s ability to change this sort of behavior in letters to the WSJ reacting to that story this morning, ranging from GM’s “firing junior engineers” rather than top executives to “the outsized power of unions within the organization such that union mentality inflicts its ways upon the whole organization.”
And this is not the first time GM’s stultifying culture has been called to task. As Automotive News pointed out in a piece Monday, the executive who “led Pontiac during the division's ‘We Build Excitement’ era in the early 1980s and looked like a CEO-in-waiting” was talking about GM’s “culture problem” three decades ago. What did that get Bill Hoglund, who died recently at 79? More telling, the piece suggests, is what it didn’t get him: the brass ring of leading the company.
In a statement, House Energy and Commerce Committee Chairman Fred Upton tells Reuters that he will be pressing for “straight and honest answers” today and that “GM's work to restore drivers' confidence is far from over.”
But here’s the rub, as a Bloomberg hed informs us: “GM Weathering Storm Frustrates Congress as Barra Returns.” All of the recalls and all of the bad press “have yet to scare consumers away from dealer lots,” Jeff Plungis and Tim Higgins write.
Indeed, GM’s May sales were up 13%, the best performance since August 2008. And “of 24 analysts who evaluate GM tracked by Bloomberg, only 3 had negative recommendations for investors,” Plungis and Higgins reports.
Investigator Valukas will also testify today, summarizing his findings. The prepared statement states:
Throughout the decade that it took GM to recall the Cobalt, there was a lack of accountability, a lack of urgency, and a failure of company personnel charged with ensuring the safety of the company's vehicles to understand how GM's own cars were designed.
We found failures throughout the company — including individual errors, poor management, byzantine committee structures, lack of training, and inadequate policies.
Valukas concludes: “I understand that while this report answers many questions, it leaves open others,” citing two possible legal ramifications and the need for GM to “to ensure that this never happens again.”
The unmentioned question is whether the outrage over GM’s culture will remain a tempest in the teapots of its own boardroom, congressional committees, courtrooms and the media or if it will boil over to the consumer republic at large and eventually impact sales. Your bet?