General Motors

General Motors (GM) is a US carmaker that was the world’s biggest, although Toyota is challenging it for the title. It was hard hit by the global financial crisis, needing a government bailout, but emerged from chapter 11 reorganisation in 2009, and held an initial public offering in 2010. It returned to profit in 2011.

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GM hires crisis expert for recall response team

US firm seeks to repair reputation amid probe into cars with ignition flaws tied to 13 deaths

PUBLISHED : Saturday, 05 April, 2014, 1:07am
UPDATED : Saturday, 05 April, 2014, 1:07am

General Motors has retained crisis communications expert Jeff Eller as it builds a team to help respond to the recall of small cars with faulty ignition switches tied to 13 deaths.

Greg Martin, a spokesman for the Detroit-based company, confirmed that Eller would join the team guiding the carmaker's response to the recall. Eller had been director of media affairs in the Clinton White House, according to his LinkedIn page.

They’ve brought in very clean, independentminded outsiders
JEFFREY SONNENFELD, PROFESSOR

GM is adding experts with a history of managing crisis situations as it seeks to repair its reputation. This week, the company hired Kenneth Feinberg, the lawyer who managed funds for victims of 9/11 terrorist attacks, to consider whether to compensate crash victims.

Jenner & Block chairman Anton Valukas, who prepared the report on the Lehman Brothers bankruptcy, recently joined GM to co-lead the internal probe of who knew what and when about the ignition flaws.

"As we have from the start, we are drawing upon those who have deep experience and expertise in these matters," Martin said.

Chief executive Mary Barra fielded pointed questions and accusations this week from US senators during a panel holding a hearing into why it took the company so long to recall 2.59 million small cars with potentially faulty parts. One senator said GM had a "culture of cover-up" and another predicted it might face criminal liability.

Barra would have to appear before the Senate panel again, said US Senator Dean Heller of Nevada. "We haven't heard the end of this yet," said Heller, the top Republican on the Senate Commerce subcommittee probing the recall. "They're going to have to come back, and Barra said she would."

Barra was joined at the hearings this week by Mark Reuss, head of product development; Grace Lieblein, head of purchasing; and Bob Ferguson, head of Cadillac and former head of the company's lobbying office. She was also joined by Michael Millikin, GM's general counsel, and Selim Bingol, head of both communication and public policy.

"She's put her A-Team on this," said Jeffrey Sonnenfeld, a business professor at Yale University. "On top of that, they've brought in these very clean, independent-minded outsiders whose reputations are way too strong to worry about needing to cater to any imperative to protect rather than to surface the truth."

By hiring Eller, GM adds a Washington insider with experience in how Congress handles an automotive crisis. He worked on the Bridgestone Firestone recall related to tyres on Ford Explorer sport-utility vehicles that lead to a new federal law in 2000. In this case, he will have on his side GM's already-large presence in the Capitol.

GM spent more money than any other carmaker last year nurturing ties with the US Congress and federal government and was among the top 50 spenders of any group on lobbying in Washington, according to the Centre for Responsive Politics, a Washington-based non-profit group. The company kept a stable of 48 lobbyists on call, paying them US$8.82 million.

The team included 12 in-house lobbyists plus at least nine outside firms, including one headed by Kenneth Duberstein, a former chief of staff in the Reagan White House. The full cadre of lobbyists also included former senator Don Nickles and two former members of the US House of Representatives, Deborah Pryce and Henry Bonilla.

The biggest US carmaker's internal and external lobbyists were in research mode now, reaching out to members on the committees that posed the biggest risks to the company, said a source.

Those getting calls included members of the Senate Commerce, Science and Transportation Committee, the House Energy and Commerce Committee and the House Oversight and Government Reform Committee, said the person. It included determining the positions of members, their concerns and problems, and whether they represented family members of victims, the person said.

The information from the lobbying team will be critical to Eller and others in the company as they anticipate what lawmakers might focus on in upcoming hearings and try to understand which members are likely to take tougher action.

GM could also get some help from the Alliance of Automobile Manufacturers, a Washington-based trade group that includes most major carmakers and lobbies Congress.

"The primary concern is that some members would like a rush to judgment," said Wade Newton, the group's communications director.

Already, he said, legislation was being introduced that would affect the industry.

"In many cases, members are just reintroducing old bills with provisions that appear to have little or no applicability to the current situation," he said.

Eller worked on the Clinton-Gore campaign team in 1992 before serving in the White House, according to his LinkedIn page. In 1994, he joined Public Strategies, a consulting firm with experience in public relations, according to a biography that had been on the company's website earlier this week and later appeared to have been removed. Eller left Public Strategies last month, said Rebecca Ballard, a spokeswoman for Hill and Knowlton.

"They've made a very smart decision," said Joe Lockhart, a former spokesman for the Clinton White House who worked on several political campaigns with Eller. "Jeff's very smart, very calm under pressure and most importantly understands the need to aggressively tell his clients story in an increasingly difficult media environment."

A lengthy 1994 Forbes magazine article about his days in the White House describes him as possibly "the most linked, multiplexed, plugged-in human on the planet - or at least in politics".

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