NEW YORK – General Motors CEO Mary Barra says the automaker is working as quickly as possible to supply dealers with replacement ignition switches for recently recalled cars, including adding a third production line for the part, and says the company will be better in the future for the crisis.
Barra also stops short of speculating on the effect the recall will have on GM’s four brands, but says Chevrolet, which accounts for most of the 2.6 million recalled units, has a chance to prove itself to customers.
“For Chevrolet, this is a huge opportunity to demonstrate what the brand means going forward,” she tells the 2014 Automotive Forum, an event linked to the New York auto show and sponsored by the National Automobile Dealers Assn. and J.D. Power.
In the first full month of sales under the shadow of the recall, blamed for 13 deaths and 32 crashes, GM sales appear to have held up, gaining 8.1% over year-ago, according to WardsAuto data.
Itay Michaeli, an analyst with Bank of America Merrill Lynch, expects the impact of the recall on future sales to be muted.
He says sales tend to “come back quickly” for automakers embroiled in highly publicized recalls, but adds, “The question on brand and (market) share is, how much more bad news is there?”
GM last week said it would also be replacing the ignition-switch cylinder on the small cars from Chevy, Saturn and Pontiac, in addition to fixing the switch itself.
Cadillac global marketing chief Uwe Ellinghaus tells WardsAuto at the conference his brand has felt no effect from the recall.
“We have not seen any decline in our Cadillac business,” he says, declining to speak to other brands.
Barra also tells the conference the automaker has one production line assembling new ignition switches and a second line will come soon. She expects a third will be added, although the fixes will still likely take months to complete.
“They will be perfect parts from a specification perspective,” she adds, alluding to the original parts that did not meet GM requirements but were installed anyway.
In another step meant to bolster GM’s safety processes, Barra announces a new product integrity group at the automaker. The unit will focus on safety from a vehicle dynamics perspective and operate under GM’s global product development unit with new safety chief Jeff Boyer playing a key role.
“We will provide the highest levels of safety and customer service,” she says.
Barra says GM will be an improved company after the crisis concludes.
“The team will learn from this recall and GM will be a better company because of it,” she says.
Media coverage of Barra’s remarks, her first public appearance since testifying before two Congressional panels about the recall earlier this month, is intense and marked afterwards by throngs of journalists jostling for a photo or comment from the chief executive.
