Reference no: EM132730968

It is a place no CEO wants to be, testifying in front of the US Congress trying to account for a design flaw with an ignition switch that led to at least 13 deaths.

But there was General Motors' chief executive, Mary Barra, who prior to taking the top manager's role in 2014 was responsible for the design, engineering, program management, and quality of GM vehicles around the world.

Why in the world would a company with the stellar reputation of General Motors purchase a part that did not meet its own specifications?

Barra's response: "I want to know that as much as you do. It is not the way we do business today. It is not the way we want to design and engineer vehicles for our customers." Later, Barra added that "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."

Mary Barra the CEO of General Motors.

And so, went Barra's strategy-repeatedly asserting that the culture of GM was changing from one where the primary focus was cutting costs, to one where the primary focus is the customer.

"The customer and their safety are at the center of everything we do," Barra said. "All I can tell you," she said, "is (at) today's General Motors, we are focused on safety." GM announced that it had entered into a consent decree with the government that will see the automotive giant pay a $35 million fine and agree to "unprecedented oversight requirements." The deal covers GM's "failure to report a safety defect ... in a timely manner" and requires it to give investigators full access to the results of its internal probe into the recalls.

But to understand why GM failed to address major safety problems, experts say, one has to examine the culture at the automaker long before Barra became CEO and look at the possible link between cost-cutting and quality. "It was a company that in the modern history of General Motors was always dominated by bean counters," said Maryann Keller, an auto analyst for four decades who has written two books on GM. "And bean counters had only one objective and that is make the numbers, at all cost. And sometimes at the sacrifice of things like quality." A huge new investment in the Michigan Tech design facility will focus on measures to anticipate problems and discover and eradicate errors before tragedies occur again. Unfortunately, the new investment will result in 1000 production jobs lost in Canada.

1. Describe the control systems failure in this case.

2. What kind of control measures can Barra set in place to make sure no such tragedies occur in the future?