Promoted to CEO only two weeks before the recall, Ms. Barra is
personally directing GM's response and pledging full transparency
and cooperation with investigators. Those are all the things you
want from a new leader, said consultant David Kiley.
"Mary Barra inherited this situation -- but she's taking charge
of it personally. She's not delegating," he said.
Meanwhile, GM is
offering a $500 cash allowance to owners of recalled vehicles
and asking dealers to offer loaner cars while their vehicle's in
the shop for repairs. That's a smart, concrete gesture, according
to Eric Dezenhall, author of "Damage Control," who's tired of
reading how "sorry" companies are when they get in trouble.
"A lot of companies make the mistake of placing corporate
rhetoric over tangible action. I think the public's had enough of
corporate courtesies about how 'deeply' the company cares," said
the CEO-founder of Dezenhall Resources in Washington, D.C. "What
goes much further is how you make good. Or how you take tangible
actions to make the problem less bad. Whether its rebates or loaner
cars, these are all steps in the right direction."
Stakes are high
The stakes are high for both GM and Ms. Barra.
Besides the real human tragedy of a dozen deaths that could
possibly have been avoided, the growing criticism of GM's slow
response threatens to overshadow the company's real advances in
quality and performance. (Chevrolet's Corvette and Silverado swept
Car and Truck of the Year honors at the 2014 North American
International Auto Show, for example).
Whether real or imagined, the perception among some consumers is
GM "put a price on people's lives" by not recalling faulty vehicles
much earlier, warns Mike Paul, founder of The Reputation
"That's a bad thing to have out there in people's minds," he
said. "That may not be true. But that's the perception. And that
perception is what's eating them up right now. GM was on its way
back: that's the message we heard repeatedly. And now this
Meanwhile, this is the first test for Ms. Barra, who broke
through the steel ceiling to become GM's first female CEO Jan. 15.
If the federal government feels misled by a company bailed out by
American taxpayers, then GM's leaders will have their hands full
jumping through hoops, said Mr. Kiley.
"GM will have to go the extra mile on everything they do --
because of all the eyeballs that are on the process now," he
GM's response so far has revolved mainly around
social media and official responses to investigators and
regulators. But there's some other, more expensive, moves GM can
make as it struggles with the biggest potential feeding frenzy
since Ford/Firestone in 2000:
Run ads: Many companies typically take out
full-page ads to apologize to their customers and detail how
they'll correct the problem. But GM has not run any ads around the
recall. "We have not addressed this in our advertising," said Greg
Martin, a spokesman for GM's in Washington D.C., via email.
Whether it's a TV spot on CBS's 60 Minutes, a YouTube video or a
full-page ad in the Wall Street Journal or New York Times, GM needs
to start communicating, says Mr. Paul. Without that, the story will
shift to a "GM is back in trouble" meme.
"They have competitors who will use this against them in private
conversations and in their positioning."
Mr. Kiley expects GM to run a full-page print ad in the next
week or so. But he doesn't blame GM for keeping its powder dry.
What good is "advertising into the wind" when the story's changing
every day, he asks.
"You don't want to go out and advertise with one message today
-- then something happens on the regulatory side that makes you
want to rewrite it. In the early going, you really handle these
things with public relations. And maybe emails to customers and
posts on social media."
Put Mary Barra on TV: GM's response should come
from the top, said Mr. Paul. From what's he's seen so far, Ms.
Barra is an excellent communicator who could bring a woman's
perspective to the situation.
In her letter. Ms. Barra apologized to customers and
passionately defended GM's response, saying the company "acted
"This is an opportunity for her to use that skill. And also to
use, in my opinion, her female strength," Mr. Paul said.
Many male CEOs and CMOs struggle when communicating emotion,
said Mr. Paul. In the case of a recall involving a dozen deaths,
consumers are looking for an emotional, not a by-the-numbers
response, from GM.
"She wants people to be thinking that GM cares not just about
adults, or individual drivers, but about families. If she
does that well, it's a home run. But she has to take the risk to
get the reward."
There's precedent for the approach in Detroit. During the
Ford/Firestone tire recall-crisis of 2000, ex-Ford CEO Jacques
Nasser appeared on national TV commercials to profess the
auto-maker's commitment to safety. During the 1980s, Lee Iacocca
appeared in popular TV spots touting the turnaround of
But times change. Now that the dark arts of spin control have
entered pop culture, most consumers fancy themselves crisis-PR
experts, said Mr. Dezenhall. So good luck to any CEO seen as trying
to "spin" away bad news in TV spots.
"That whole trope of the CEO making an impassioned plea doesn't
work as well in this era as it did in the past. In fact, it often
costs them their job. We have a joke in our office: whoever goes on
TV gets fired."
Hire outside an crisis-PR shop: That's another
typical response by companies in trouble. They hire big outside
agencies such as Levick, or experts such as Mr. Dezenhall and Mr.
Paul, to give them a different perspective from that of the usual
lawyers and bean-counters. GM has already hired two outside law firms
to help with its internal probe, according to CNBC.
But when it comes to crisis marketing, GM is "relying on our
existing firms for support as needed," said Mr. Martin.
IPG's Weber Shandwick works with GM. The global PR
firm has a special unit devoted to crisis management which GM might
be tapping into already. Other shops include Interpublic Group's
Commonwealth for advertising; Aegis' Carat for media buying; Publicis' Leo Burnett for Silverado creative; and Rogue
In the end, Mr. Kiley said he'd be "shocked" if federal or
Congressional investigators discover a conspiracy at the top of GM
to try to sweep the ignition switch scandal under the rug. But he
believes GM will still end up paying fines, and suffering other
damage, before this is all over.
"What's way more likely is they'll find a couple of individuals
in the middle ranks of GM who expressed idiotic judgment in dealing
with this," said Mr. Kiley.
--Alexandra Bruell contributed to this story.