This Can’t Be Good For Rebuilding Trust: More Bad News for General Motors, and The Business Press Weighs In


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Today (May 20th), General Motors announced the recall of an additional 2+ million vehicles, bringing its 2014 total to 15 million…..and counting:

“General Motors said on Tuesday it is recalling another 2.42 million vehicles in the United States, raising the number of vehicles it has recalled so far this year to more than 15 million. The four recalls will include Buick Enclave, Chevy Traverse and Cadillac Escalades. GM said it now expects to take a nearly $400 million charge in the second quarter related to recall repairs, double of what it expected earlier.”

This latest chapter in the GM reputation saga comes right on the heels of the mountain of negative press and fines the company has received in 2014:

The image hole GM has been digging for itself this year is only getting wider and deeper. Companies suffering through the “long tail’ of negative publicity, and body blows to their public reputations, will recognize the kinds of rhetoric we are now seeing with greater frequency in the business press:

Daniel Fisher, Forbes: “The company will re-retrain employees to ‘encourage discussion of safety issues’ (and) ‘expressly disavow statements diluting the safety message’ as detailed in the now-infamous memo urging employees to avoid phrases like ‘this is a lawsuit waiting to happen.’ … Urging employees to take flight with the prose in their internal memos isn’t going to make GM a better company. It might make for some more spectacular jury verdicts in the future, though.”

Kyle Stock, Businessweek: “If you think of GM as a scandal-tarred politician, the company would be standing in front of a wall of cameras naming all of its mistresses and back-room dealings. Basically, the automaker is trying to avoid a prolonged Anthony Weiner-style circus.”

Wow!!! And, where does GM go from here? Well, the company has re-hired a former executive to become the SVP of Global Communications. Perhaps he can begin by repairing the damage done by internal memos encouraging GM employees to avoid using seven “taboo” words: Problem, Safety, Failed, Good, Bad, Defect, and Defective. That said, there’s little indication that General Motors is weighing the tactical and strategic impact on perceived trust levels, by either current or prospective owners. Gauging the perceptions of its customers and dealership corps, and initiating a program to stabilize the company’s public perception of value and trustworthiness, should be major priorities.

Above all, evolving to a more customer-centric, honest, open, and quality-focused enterprise culture is a fundamental goal. But, will, or can, that happen? As reported in a recent Detroit Free Press article, “Can GM Regain Confidence of Regulators and Consumers?”: “Whether all the actions so far, taken in the heat of crisis, will lead to a change in GM’s culture will take longer to know. Will safety truly become a top priority? Or will the safety initiatives eventually give way to the pressure to keep new products on schedule, satisfy impatient investors and cut production costs?” At this point, no news would be good news for GM, so that vehicle and cultural repair can begin.

Michael Lowenstein, PhD CMC
Michael Lowenstein, PhD CMC, specializes in customer and employee experience research/strategy consulting, and brand, customer, and employee commitment and advocacy behavior research, consulting, and training. He has authored seven stakeholder-centric strategy books and 400+ articles, white papers and blogs. In 2018, he was named to CustomerThink's Hall of Fame.


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