General Motors Ignition-Switch Recall Crisis

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Running Head: GENERAL MOTORS IGNITION-SWITCH RECALL CRISIS
GENERAL MOTORS IGNITION-SWITCH RECALL CRISIS
Joseph Porchetta
Purdue University
Author Note
Joseph Porchetta is a graduate student at Brian Lamb School of Communication,
Purdue University
This crisis case response analysis is based on General Motors (GM) ignition-switch
recall that began in February 2014 and is still an ongoing issue. This case is interesting

because it involves an organization that’s one of the top global leaders in the auto industry. GM
is a U.S. based auto manufacture, with its headquarters located in Detroit, Michigan. The
company is an American icon with a long history of innovation and has been a household name
for over one hundred years (Davis, 2012).
Due to the financial crisis of 2008 that destabilized the economy, GM filed for the biggest
industrial bankruptcy in history in 2009 (Bigman, 2013). The U.S. government purchased its
assets in order to save the industry with over two-hundred thousand jobs at risk (Bigman, 2013).
This was a big event in GM’s history in regards to their financial stability, but nowhere near the
crisis to follow years later that risked their credibility and reputation. After six years of an
unprecedented cash infusion and re-structuring into a new organization, GM is thriving once
again as a publically traded company (Bigman, 2013). With solid growth and performance, the
New CEO, Mary Barra, was appointed in January 2014. Even though this crisis was considered
the auto industry’s biggest story in 2014, the industry celebrated GM’s new CEO, who became
the first women to lead a global auto manufacturer (Wayland, 2014).
GM’s successful turnaround was recently shaken with a crisis of recalling millions of cars
with faulty-ignition switches starting in February 2014 (Shepardson, 2015). The faulty-ignition
switches caused vehicles to shut off and air bags to fail during an accident. GM’s initial recall
linked thirteen deaths to this defect (Shepardson, 2015). When the crisis publically unfolded,
there was an independent internal investigation led by Attorney, Anton Valukas, which included
government congressional hearings (Shepardson, 2015). The crisis escalated over the following
months with millions of recalls linking over fifty deaths to the defective ignition switches
(Shepardson, 2015). The Investigation revealed GM knew about the faulty-ignition switches for
over ten years and waited too long to disclose the defect responsible for these deaths and
thousands of injuries (Krisher, 2014). They finally admitted knowing about the deadly defects

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for over ten years and were subject to a fine, criminal investigation and numerous lawsuits
(Isidore & Marsh, 2014).
In utilizing Fink’s four stage model (Sellnow & Seeger, 2013) to summarize and analyze
this case, the acute stage began in February 2014, with the recall of 2.6 million cars due to
faulty-ignition switches (Shepardson, 2015). At that point in time, GM admitted thirteen deaths
linked to the defects. Following the announcement, the new CEO became the crisis manager by
apologizing with honest and sincerity to the victims and consumers. She announced changes
and an internal investigation, which further revealed the organization, knew about these defects
for over ten years and didn’t enact a recall due to costs (Ivory, 2014). This negatively exposed
GM’s corporate culture for incompetence and neglect, such as hiding safety issues. (Rushe,
2014). In the prodromal or pre-crisis stage, they had opportunities to manage this issue for
several years from internal discussions and consumer complaints between the years 2001 to
2005 (Rushe, 2014). They could’ve changed course following individual lawsuits, which were
settled out of court, based on fatalities linked to the defect prior to 2013 (Meier & Stout, 2014).
After admitting to knowing about the defect, regulators fined GM thirty five million dollars (Isidore
& Marsh, 2014). Over the following months, more recalls appeared totaling about thirty million
vehicles for various defects, with an increasing amount of deaths directly linked to faulty-
switches. Toward the end of 2014, the crisis entered the chronic stage from the success and
repetition of the CEO using a strong response with image repair strategies of apology, corrective
action with accommodation of compensation (Sellnow & Seeger, 2013). This crisis will continue
to linger from lawsuits, additional victim compensations and social issues.
The four main publics this crisis most impacted are consumers, franchise dealers,
shareholders and employees. The consumers are the most important stakeholders and they
continue to be impacted by this crisis. GM would not exist without the support of consumers.
Franchise dealers are in the front lines in marketing and selling GM cars to consumers. The

dealers can also be used in the public relations strategy, by receiving feedback on the impact of
GM crisis response strategies. Shareholders (investors) are a vital stakeholder for any
publically traded company. Consumer protection laws protect consumers with recalls, which the
organization must assume all costs. Since GM is a multi-billion dollar organization, it can absorb
an expensive short term cost, but losing confidence from shareholders or consumers can have
long-term effects on their financial stability (Nath, n.d.). The GM employees are another vital
component to an organization during a crisis. They can also become part of the public relation
strategy during the crisis by obtaining feedback from the crisis response strategies among the
communities (David, 2011).
GM’s communication and media responses in the prodromal stage or pre-crisis stage
were somewhat limited and aloof. Their internal communication showed a lack of two-way flow
and incompetence. GM knew about the faulty-ignition switches since the early 2000’s and chose
to ignore it due to the costs to replace them. After the initial recall in 2014, it was discovered that
there was communication among employees and suppliers about the defect in the switches in
various times throughout the years.
GM engineers and newspaper auto writers were talking about the ignition switch defect
about a decade before the recall crisis began in February of 2014(Green & Plungis, 2014). In
2005, the New York Times reported that GM franchise dealers were telling Cobalt owners to
shed the load off their key ring so the engine would not shut off from the weight (Green &
Plungis, 2014). This was GM’s Spokesman’s partial statement at that time regarding to this
issue in their service bulletins, “Services advisors are telling customers they can virtually
eliminate this problem by taking several steps, including removing none essential material from
their key ring” (Green & Plungis, 2014). That type of information communicated between dealers
and consumers is evidence that GM had directed internal communication with their dealers, on
how to handle any complaints regarding the ignition issue.

GENERAL MOTORS IGNITION-SWITCH RECALL CRISIS
5
Through a lawsuit that began in year of 2010 from lawyer representing the death of a
pediatric nurse in the state of Georgia, documents revealed GM had an early understanding of
this defect while developing the Saturn Ion in 2001 (Green & Plungis, 2014). At that time, they
thought the problem became resolved. In 2003, a GM engineer investigated a consumer
compliant and noted the problem, but yet nothing was done. After numerous complaints, the first
press about the faulty-ignition in the Cobalt model surfaced from auto reviewer, Gary Heller, in
2005 from the Daily Item in Sunbury, PA (Green & Plugis, 2014). His statement in the
Pennsylvania newspaper stated: “unplanned engines shut down happened four times during a
hard-driving test last week. I never encountered anything like this in 37 years of driving and I
hope I never do again” (Green & Plungis, 2014). The following month the New York Times
reported auto reviewer, Jeffery Sabatini, describing his wife’s bad experience with a Chevrolet
cobalt, “She was driving on the freeway and the car just went dead. She recalled bumping her
knee against the steering column just before the car shut off” (Green & Plungis, 2014). He
continued to describe how she was able to get over to the shoulder of the road unharmed
(Green & Plungis, 2014). GM stated this was a rare scenario. This is a comment from their
spokesman, Alan Adler, “In rare cases when combination of factors is present, a Chevrolet
Cobalt driver can cut power to the engine by inadvertently bumping the ignition key to the
accessory or off position while driving the car running” (Green & Plungis, 2014). In this
statement, it’s clear the spokesman was shifting the blame to the drivers instead of GM
engaging in a recall, which would have been the right thing to do at that time.
During the 2000’s, GM was experiencing heavy competition and was in a cost cutting
atmosphere leading up to their bankruptcy in 2009. “The messages from top leadership at GM -
both to employees and to the outside world - as well as their actions were focused on the need
to control costs” (Valukas, 2014, p. 250). Even though there internal mission was, that they
couldn’t afford any defects in products due to stiff global competition (Valukas, 2014), the

organization’s communication culture was that of a hush environment (Sheridan, 2014). If you
needed extra funding to correct a problem it would come out of that groups department only,
thus no one spoke up (Valukas, 2014). The reduction in engineers’ staff caused the employees
to prioritize costs over safety, which included quality parts (Valukas, 2014).
According to Marra (1998), an organization’s communication culture can enhance or
negatively impact a company’s credo or in this case, it’s internal mission of safety or no defects
policy over anything else. The internal communication culture developed into placing the blame
toward another employee (Valukas, 2014). This resulted in having several committees with
investigations from consumer complaints over the years that never reached the GM leadership
for real solutions because it was too costly (Valukas, 2014). Based on the independent Valukas
report, GM blamed it on weak internal communication. “Ms. Barra has termed a "silo" culture in
which managers in different departments failed to communicate safety concerns to one another
or to senior executives” (Bennett & Lublin, 2014, par 12).
In assessing GM’s crisis response to the recall crisis, they originally used the denial
strategy (Sellnow & Seeger, 2013) as evidenced by neglecting all the signs of a growing
problem. Prior to the recall, they emerged with a positive reputation coming out of bankruptcy as
a financially stable company with a new image and confidence from its stakeholders. This
gained confidence was excelled by becoming a public traded company again with growing sales
and revenues (Bigman, 2013). They had recalls or poor quality issues in the past, which also
included the bankruptcy crisis in 2009 (Bigman, 2013). Regardless of reputation or prior crisis
history, any human harm or death from an organization’s intentional or unintentional misdeeds
warrants an immediate strong crisis response with a full apology, full responsibility and
corrective actions with accommodations (Coombs & Holladay, 2002; Sellnow & Seeger, 2013).
Based on attribution perspective, GM would also be perceived to have a high credibility
responsibility from its stakeholders (Sellnow & Seeger, 2013). GM appropriately used these

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7
exact response strategies of swift action, full responsibility, mortification and corrective action
with accommodations in order to restore their image and manage this crisis.
From the beginning of the acute stage of the crisis, GM’s CEO led the crisis
management efforts. Barra took a proactive approach, which has proved more effective in
obtaining a positive or balanced media story than a reactive approach (Holtzhausen & Roberts,
2009). She used the best practices of openness, honesty and partnered with the media and
other stakeholders, such as employees or dealers (Seeger, 2006). Barra immediately reached
out to the media by inviting them to the corporate office and addressed the initial recall directly
to them (Townsend, 2014). She told the reporters there will be “no scared cows” with an
investigation to find what went wrong, since it took so long for GM to address this issue
(Townsend, 2014). At the meeting she stated "I am very sorry for the loss of life that occurred,
and we will take every step to make sure this never happens again," (Krisher T. , 2014, par 3).
The CEO took the crisis head on by publicly taking blame, responsibility, apologizing with
compassion and reaching out directly to consumers and victims (Wayland, 2014; Geier, 2014).
GM began using a call center of fifty people, blogs, letters to owners, news media with videos
and social media to send out recall messages (Goel, 2014). Their messages included warning
people not to put weight on their key rings until switches are replaced due to potential engine
shut down (Krisher T. , 2014). They empowered their franchised dealer with tools to help with
recalls and to satisfy customers, such as free loaner cars. Barra’s message became about
safety for consumers as the priority. She personally met with victim families and issued another
statement of apology to them at a congressional hearing (Appendix B consumer statements to
congress). Barra also launched an independent investigation that later on proved to discover
additional recalls of up to thirty million cars with more deaths linked to the ignition defect.
Prior to the initial meeting with the media, Barra posted a letter to GM employees via the
company’s intranet to update them on the recall. She touched on key points such as trying to

maintain positive morale by stating, “Our Company’s reputation won’t be determined by the
recall itself, but by how we address the problem going forward” (Argenti, 2014). Management
continues to update employees and consumer with a series of videos by Barra. (Appendix B
statement to employees). According to David (2011), employees have the expectation of the
organization to protect and inform them with accurate information in order to minimize external
rumors. Internal communication through internal messages and with face to face meetings will
help to maintain moral, trust and loyalty (David, 2011).
After receiving the independent investigation report, Barra took a stronger stand for
action by dismissing fifteen employees and disciplined others directly involved with the
mishandling of the issue (Higgins, Green, & Plungis, 2014). She was cleared from knowing
anything about this defect during her time at GM. She stated to about 1,000 employees at GM’s
technical center in Detroit, ““This should have never happened. It is simply unacceptable”
(Higgins et al., 2014). She continued with apologies and promised further transparency with a
cultural change of accountability (Jusko, 2014). Barra also implemented a compensation
program for victims and their families managed by Kenneth Feinberg, who ran similar funds for
victims of the Sept. 11 terrorist attacks and the 2010 BP oil spill (Higgins et al., 2014).
As this crisis entered into the chronic stage, GM appointed a global safety leader and
added thirty five product safety investigators to identify and address issues more quickly. They
instituted the program, Speak up for safety, which empowers employees to speak up on safety
issues and share ideas with the leadership team. The victim compensation claims are still
ongoing at this moment (Wayland, 2014).
Social media has also become an important part of the crisis plan in order to show its
commitment to doing the right thing for its customers (Goel, 2014). GM uses new media outlets

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to reach out to owners who haven’t serviced the recalls and to manage customer service or any
concerns (Wilkinson, 2014). They have twenty people managing its new media sites and
monitor other various sites with responses seven days a week (Goel, 2014). For example after
spending two hours on the phone trying to get help for her Saturn, Lauren Munhoven, from
Alaska, posted on twitter, “@GM your agents keep telling me to take my car to a GM dealer for
the recall, after I’ve explained I live on an island in Alaska! Help!!!!” (Goel, 2014, par 7). A
representative from GM’s new media team responded quickly with a loaner car and funded to
ship her car to a dealer off the island. She later reposted a positive comment about GM’s
service to her situation (Goel, 2014). On their Facebook page, negative comments or
complaints are visible with GM service representatives answering there questions (Goel, 2014).
Like customer, Donna Gender, who was outraged about her daughter’s car by posting, “used
every penny she had to purchase her dream car and instead she is stuck with a death trap on
wheels” (Goel, 2014). According to Goel (2014), after publically engaging with outraged
comments similar to Gender, the online representatives would directly resolve it through private
messages (Appendix B Facebook). Some costumers use social media to gain support in order
to put pressure to obtain a loaner car for the recall. (Goel, 2014). Owner, Garret Garett stated, “I
take car safety very serious”, since her sister was in a fatal car crash (Goel, 2014). She went on
a Facebook page called, GM recall survivors, to get support and finally received a loaner car
(Goel, 2014).
In the current chronic stage, GM searches for complaints from the national highway
traffic safety administration and continues to have people monitor social media sites, such as
twitter and auto chat rooms to find consumer problems or complaints on a twenty four hour
basis (Welch, 2014). GM’s president, Dan Ammann, stated in an interview to the press, “We
have to identify issues before they become a problem” (Welch, 2014, par 6). Roland Rust, a
professor of marketing at the University of Maryland, stated GM’s response via online sites was

“absolutely the right thing to do”, thus indicating their damage has been minimal online (Goel,
2014, par 17). During the chronic stage they aggressively continue to penetrate owners for
recalls or additional victims and to manage any consumer concerns (Wilkinson, 2014).
Shareholders were impressed with how GM’s CEO was handling this crisis. Their year-
end earnings were still good regardless of the crisis. Warren Buffett’s, Berkshire Hathaway
investment company, showed shareholder confidence by purchasing an additional twenty one
percent of GM stock totaling forty million shares (Crippen, 2014). The franchise dealers claimed
to be having a profitable year despite the crisis. GM needs to maintain two-way communication
to update all dealers of current events with the recall in order to continue to inform and reassure
consumers. According to majority of the dealers, GM has done a good job in managing the crisis
(Carey & Woodall, 2014).
This crisis affected many people’s lives from poor internal communication and by
prioritizing profits over safety. What made this case worse was the recall should have happened
ten years earlier, since the defective ignition was known at that time. One important thing GM
could have done differently to avert the crisis all together is by utilizing the framework of issue
management back in the early to mid-2000s (Crable & Vibbert, 1985; Sellnow & Seeger, 2013).
This would have saved GM in the long run, millions of dollars, ongoing efforts to restore their
image or reputation, and creditability that was built over 100 years, but most importantly
people’s lives. Regardless and based on this research, GM handled this crisis well. The new
CEO’s talent and skills were evident from the beginning of the recall. She showed the human
side of GM by caring and invoking that she is a mother with kids and this connected her with
consumers. Her public relations tactics resembled former Johnson & Johnson CEO, Burke, in
the 1982 Tylenol tampering case. Acting swift and using the best practices (Seeger, 2006) of
being readily available to the media. Image repair strategies of apology and corrective action
with accommodation were appropriate response strategies executed in this case (Sellnow &

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Seeger, 2013). Even though this crisis will linger for years from various lawsuits, Barra’s
success was noticed by Fortune magazine, who named her crisis manager of the year (Geier,
2014). She has also become a public advocate (Ivory, 2014) for the industry by creating the new
Global Product Integrity organization, which enhances overall safety and quality (Jusko, 2014).
The skills of this likable CEO with reformist attitude in managing in GM’s worst crisis, has
contributed to her successfully handling this crisis (Geier, 2014) .
Appendix A
Written Testimony of General Motors Chief Executive Officer Mary Barra
Before the House Committee on Energy and Commerce Subcommittee on Oversight
and Investigations “The GM Ignition Switch Recall: Why Did It Take So Long?” April 1,
2014INTRODUCTION
Chairmen Murphy and Upton, Ranking Members DeGette and Waxman, members of the
committee…My name is Mary Barra, and I am the Chief Executive Officer of General Motors. I
appreciate the opportunity to be here today. More than a decade ago, GM embarked on a small
car program. Sitting here today, I cannot tell you why it took years for a safety defect to be
announced in that program, but I can tell you that we will find out. When we have answers, we
will be fully transparent with you, with our regulators, and with our customers. As soon as l
learned about the problem, we acted without hesitation. We told the world we had a problem
that needed to be fixed. We did so because whatever mistakes were made in the past, we will
not shirk from our responsibilities now and in the future. Today’s GM will do the right thing. That
begins with my sincere apologies to everyone who has been affected by this recall…especially
to the families and friends of those who lost their lives or were injured. I am deeply sorry. I’ve
asked former U.S. Attorney Anton Valukas to conduct a thorough and unimpeded investigation
of the actions of General Motors. He has free rein to go where the facts take him, regardless of

the outcome. The facts will be the facts. Once they are in, my management team and I will use
his findings to help assure this does not happen again. We will hold ourselves fully accountable.
However, I want to stress that I’m not waiting for his results to make changes. I’ve named a new
vice president for Global Vehicle Safety, Jeff Boyer (announcement is included below). This is a
first for GM. Jeff’s first priority is to quickly identify and resolve any and all product safety issues.
He is not taking on this task alone. I stand with him. My senior management team stands with
him. And we will welcome input from outside GM — from you, from NHTSA, from Mr. Valukas’
findings, from our customers, from our dealers, and from our current and former employees.
This latest round of recalls demonstrates just how serious we are about the way we will do
things at the new GM. We identified these issues. We brought them forward and we are fixing
them. I have asked our team to keep stressing the system at GM and work with one thing in
mind — our customers and their safety are at the center of everything we do.
CUSTOMERS
Our customers who have been affected by this recall are getting our full and undivided
attention. We’re talking directly to them through a dedicated website, with constantly updated
information, and through social media platforms. We’ve trained and assigned more people to
our customer call centers, and wait times are down to seconds. And, of course, we’re sending
customers written information through the mail. We’ve empowered our dealers to take
extraordinary measures and to treat each case specifically—and they are doing a great job
taking care of our customers. Here’s what we are doing with our dealers: if people do not want
to drive a recalled vehicle before it is repaired, dealers can provide them a loaner or rental car
— free of charge. If a customer is already looking for another car, dealers can provide an
additional cash allowance for the purchase or lease of a new vehicle. Our supplier is
manufacturing new replacement parts for the vehicles that are no longer in production. We have

GENERAL MOTORS IGNITION-SWITCH RECALL CRISIS
13
commissioned two and asked for a third production line, and those parts will start to be
delivered to dealers as soon as possible. These measures are only the first in making things
right and rebuilding trust with our customers. As I’ve reminded our employees, getting the cars
repaired is only the first step. Giving customers the best support possible throughout this
process is how we will be judged. I would like this committee to know that all of our GM
employees and I are determined to set a new standard. And I am encouraged to say that
everyone at GM—up to and including our Board of Directors—support this. I’m a second-
generation GM employee and I’m here as the CEO, but I’m also here representing the men and
women who are part of today’s GM and are dedicated to putting the highest-quality and safest
vehicles on the road. I recently held a town hall meeting to formally introduce our new VP of
global vehicle safety to the company. We met at our Technical Center, one of the places where
the men and women who engineer our vehicles work. They are the brains behind our cars, but
they are also the heart of GM. It was a tough meeting. Like me, they are disappointed and
upset. I could see it in their faces, and could hear it in their voices. They had many of the same
questions that I suspect are on your minds. They want to make things better for our customers,
and in the process, make GM better. That’s what I’m committed to doing. I would now be happy
to answer your questions.
Thank you.

Appendix B
March 4, 2014
Mary Barra
GM CEO Updates Employees on Recent Recall
Today, General Motors CEO Mary Barra posted a letter to GM employees on the company
intranet. She talks about the approach GM is taking to put the customer first in how it handles
the recent ignition switch recall. Customers who have concerns should contact their dealer or
the GM customer assistance center.
Dear GM Employee:
As employees of General Motors, many of us have been asked about our recently announced
recall. I would like to make sure you know where we stand and what we are doing about it.
First and foremost, everything we are doing is guided by one unwavering principle: do what is
best for our customer. Customer safety and satisfaction are at the heart of every decision we
make.
Our process for determining whether and when to recall a vehicle is decided by experienced
technical experts. They do their work independent of managers with responsibilities for other
aspects of the business, so that their decisions are made solely on technical facts and
engineering analysis.
When this was brought to my team a few weeks ago, we acted without hesitation to go well
beyond the decision by the technical experts. Specifically, we:
•Created a working group of senior executives, which I lead, to direct our response,
monitor our progress and make adjustments as necessary.
•Empowered our dealers with resources to provide affected customers with the peace of
mind they deserve.
•Coordinated with our supplier to ramp up development and validation of replacement
parts to get them into the field as fast as possible.
•Provided federal regulators with comprehensive information on this issue.
•Launched an internal review to give us an unvarnished report on what happened. We
will hold ourselves accountable and improve our processes so our customers do not
experience this again.
• We sincerely apologized to our customers and others who have a stake in GM’s
success.
Of course, recalls of this size and scope always take time to play out. Various other parties will
naturally be involved, and GM will cooperate fully. You can expect additional developments in
the near term.
That has led some to ask if the recall of these out-of-production vehicles might affect our
company’s reputation or sales of our current models.

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15
My answer is simple: that’s not the issue. The vehicles we make today are the best in memory
and I’m confident that they will do fine, on their own merits. And our company’s reputation won’t
be determined by the recall itself, but by how we address the problem going forward.
What is important is taking great care of our customers and showing that it really is a new day at
GM.
While I deeply regret the circumstances that brought us to this point, I appreciate how today’s
GM has responded so far. We have much more work ahead of us and I’m confident we will do
the right thing for our customers.
Mary
Appendix C
On the General Motors Facebook page, a complaint was answered with an invitation from the
company to discuss matters.

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