GM’s Delicate Image Takes Back Seat in Recall

GENEVA – General Motors President Dan Ammann declines to speculate on the potential fallout from a U.S. recall due to faulty ignition switches, a defect linked to several motorist deaths in recent years.

“We’re doing everything we can to work with our dealers and our customers to get everything as straight as we can,” Ammann tells WardsAuto on the sidelines of the Geneva auto show.

Ammann declines to say whether the recall, involving 1.6 million Chevrolet, Pontiac and Saturn small cars and CUVs sold mostly in the U.S. between the ’03 and ’07 model years, will create a headwind for the automaker as it continues to polish its image after a 2009 taxpayer-backed bankruptcy.

Also Tuesday, GM CEO Mary Barra told employees in a letter the recall would “take time to play out” and its customers were the focus of every decision made on the issue. She said neither the company’s image nor future sales was a consideration, and an internal investigation had been launched.

GM North America President Alan Batey offered a public apology for the recall last month when the automaker expanded the callback, a defect where weight on an ignition key ring or a big bump in the road could jolt the ignition switch out of the “run” position and kill power to the engine and electronic safety technology such as airbags.

The defect has been linked to 13 deaths.

If National Highway Traffic Safety Admin. investigators determine GM did not respond quickly enough to the issue and levy fines, it could damage a delicate but rapidly improving image for the automaker, Since bankruptcy, it has swiftly returned to profitability, won a number of quality awards and witnessed critical success for several of its latest products. Lawsuits likely would follow any government fine.

Toyota wrestled with a similar image problem when in 2010 NHTSA determined it did not recall quickly enough millions of vehicles with safety defects and paid $66.2 million in NHTSA fines. It faces millions more in civil penalties.

Ammann says there is “nothing new to announce” regarding the 1-week-old NHTSA investigation and reiterates GM is working quickly and cooperatively to resolve the problem.

“We’re being very proactive, very transparent to everybody as to what it is we’re getting done,” he says.

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