GM's Mary Barra Wants to Talk Cars but Recall Questions Reign

NEW YORK (TheStreet) -- If GM  (GM) thought it could change the media focus from a widely publicized recall to new products at the New York Auto Show, it thought wrong.

Perhaps CEO Mary Barra should have known better. At the NADA/J.D. Power Automotive Forum on Tuesday, the day preceding the opening press day of the auto show, Barra began a speech by saying that "it's really great to be in front of an automotive experience," drawing an obvious contrast to her early April appearances before two hostile congressional committees.

Barra saluted the audience for "your love of cars" and noted its recognition of the "privilege you get to work in this business." She seemed to be saying that she was pleased to be among friends.

She quickly noted GM's recent market and product successes, among them, she said, "Chevrolet has the strongest lineup in its history, from Spark to Impala." But she acknowledged that the successes have been "overshadowed by the intensity of the recall coverage."

That intensity was underscored minutes later. As she sought to exit at the conclusion of her appearance, Barra was mobbed by media, including camera people who battled one another for position and reporters who hurled questions, none of them remotely product-related.


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According to Forbes (Its reporter managed to get close enough to hear Barra), she pleaded with the camera people, "Guys, please don't push each other," while Mark Reuss, GM's global product development chief, used his body to try to protect his boss from being trampled.

Barra had also been mobbed at the Detroit Auto Show in January, but that was just weeks after she was named as GM's first woman CEO. This time, Barra was not so much a novelty as she was one more taciturn CEO playing defense, hoping that a crisis would pass. It seemed clear, from her earlier remarks and from her struggle to get to an exit, that Barra had not expected such a mob scene at a supposedly receptive event.

The bulk of Barra's appearance was consumed in a question-and-answer period with Jason Stein, Automotive News publisher and editor. He interspersed recall questions with state-of-GM questions. Barra said she had not expected the overwhelming attention at the Detroit Auto Show. "There are a number of women in very significant roles (so) I was surprised by it," she said.

Asked about the contrast between her trips to Washington for President Obama's State of the Union address, when she was seated with Michelle Obama, and being grilled by Congress, Barra responded: "That's life. No one leads a charmed life ... My father was a die maker for 39 years." As for appearing before Congress, she said, "I understand people have their jobs to do. It's probably not on my top 10. But I respect them."

In testifying before a hostile Congress, it cannot be said that Barra did well or that Barra did poorly. It is impossible to do well in such a situation. GM's conduct seems to have been reprehensible, both in its reaction to known ignition switch failures and in its harsh courtroom tactics in cases where plaintiffs lost family members. Nobody condemns bad conduct better than our Congress.


In Congress, condemnation skills are shared equally by liberals and tea partiers. Thus, California Sen. Barbara Boxer told Barra "You don't know anything about anything," while two former prosecutors who became senators, one a Democrat and one a Republican, pursued the topic of criminal liability. So it is not surprising that Barra seemed to have little to say to Congress.

She was, however, generally candid in the question-and-answer period at Tuesday's forum. A telling moment came when Stein noted that after all of the furor GM's corporate communications chief had left, in the typical terminology, to pursue other interests. "Really?" Stein asked archly, and Barra acknowledged that "you've got to take the right actions to have an A plus team."

Of course, the real test of GM's resilience will not be how observers evaluate Barra's public appearances, but rather in whether the company can retain market share and continue to produce good financial results, because consumers are always the ultimate judges of how a company is performing.

Among auto analysts, including three who spoke at the forum Tuesday, the consensus is that automakers generally recover from recalls. That is also the view of Larry Dominique, president of ALG, which assigns residual values to new cars.

So far, Dominique said, "we haven't seen a big drop off in (GM) product value." Comparing the GM recall to the 2009-2010 Toyota accelerator pedal recalls, he said that Toyota (TM) suffered a "pretty rapid drop in brand values (and) market share, but they recovered rapidly. They had enough brand good will that helped them recover." He added that residual valuation is a lagging indicator, so the full impact remains to be seen.

"GM does not have an image as a top-tier quality brand, although they're better than they used to be," Dominique said. "They could get hurt less (than Toyota) but we would expect to see some falloff."

One thing that works to GM's benefit, he noted, is that names most affected by the recall -- Cobalt, Pontiac and Saturn -- no longer exist. Their residual values diminished long ago.

-- Written by Ted Reed in New York

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