GM CEO said ignition-switch recall will take time to play out

DETROIT Tue Mar 4, 2014 3:38pm EST

General Motors Co's new chief executive Mary Barra addresses the media during a roundtable meeting with journalists in Detroit, Michigan January 23, 2014. REUTERS/Carlos Osorio/Pool

General Motors Co's new chief executive Mary Barra addresses the media during a roundtable meeting with journalists in Detroit, Michigan January 23, 2014.

Credit: Reuters/Carlos Osorio/Pool

DETROIT (Reuters) - General Motors Co (GM.N) Chief Executive Mary Barra said the No. 1 U.S. automaker was sorry for the recent recall of an ignition-switch linked to 13 deaths, and said the process would take time to play out but the company would work to ensure customer satisfaction.

In a letter to employees on Tuesday, Barra, who took over in January as the automotive industry's first female chief executive, said the recall would "take time to play out" and GM would cooperate with all the parties involved. She said customer safety and satisfaction would be at the heart of every decision made.

Those groups include U.S. safety regulators at the National Highway Traffic Safety Administration, which last week opened an investigation into whether the Detroit company reacted fast enough in its recall of more than 1.6 million cars.

GM employees can expect "additional developments in the near term" related to the recall, Barra said in the letter posted on GM Fastlane, the company's electronic news magazine. She did not provide more details but reiterated that the company had 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," she said.

"While I deeply regret the circumstances that brought us to this point, I appreciate how today's GM has responded so far," Barra added.

For any employees wondering how the recall would affect GM's reputation or sales, Barra said that was not the issue. "Our company's reputation won't be determined by the recall itself, but by how we address the problem going forward," she said.

Other actions taken by GM include the creation of a group of senior executives led by Barra to direct the company's response, monitor progress and make adjustments as needed; working with dealers to ensure customer satisfaction; coordinating the rollout of replacement parts with the supplier; and keeping federal regulators informed, Barra said.

GM, which went through a bankruptcy restructuring in 2009, could face a maximum fine of $35 million if it failed to notify NHTSA within five days of a recall after learning of a vehicle safety defect.

The company did not say how much the recall would cost. Analysts have said the biggest cost could result from the flurry of lawsuits likely to be triggered by the defect and the company's actions.

GM's recall was to correct a condition that may allow the engine and other components, including front airbags, to be unintentionally turned off.

GM previously said the weight on the key ring, road conditions or some other jarring event may cause the ignition switch to move out of the "run" position, turning off the engine and most of the car's electrical components. GM has recommended that owners use only the ignition key with nothing else on the key ring.

The company said last week that the initial replacement parts will be available in early April.

Last month, GM said it was recalling 778,562 Chevrolet Cobalt and Pontiac G5 compact cars from model years 2005 through 2007. Last week, it added 842,103 Saturn Ion compact cars from 2003 through 2007 model years, Chevy HHR midsized vehicles from 2006 and 2007, and the Pontiac Solstice and Saturn Sky sports cars from 2006 and 2007.

Of the cars recalled, 1,367,146 vehicles are in the United States, 235,855 are in Canada, 15,073 are in Mexico and 2,591 were exported outside North America, according to GM.

GM no longer makes any of the affected models.

GM's shares were up 65 cents, or 1.8 percent, at $36.86 in late trading on the New York Stock Exchange.

(Editing by Jonathan Oatis)

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