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Barra Named Crisis Manager of the Year by Fortune

December 30, 2014
3 min to read


Weathering General Motors' severest crisis since its 2009 bankruptcy earned CEO Mary Barra another accolade today as Fortune magazine called her crisis manager of the year, reported Detroit Free Press.


GM has repaired more than 60% of the 2.4 million cars it recalled for a defective ignition switch that has been linked to 42 deaths, seven crippling injuries and 51 less severe injuries. In addition, GM has recalled an unprecedented number (more than 30 million worldwide and about 26 million in the U.S.) of vehicles this year, which has cost it about $2.7 billion.

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But Barra took steps that showed effective leadership in the crisis. For example, she requested an independent analysis of what went wrong in which a former federal prosecutor found scores of individual and corporate decisions and practices that had a factor in failing to correct the defect for more than a decade. She also hired Kenneth Feinberg, a respected lawyer with expertise in running disaster compensation funds to establish a process for victims and their families to pursue compensation outside of court.


"Somehow, though, even as GM has seen its reputation raked over the coals, Barra has come out more admired and more likely to be emulated than ever," Fortune staff writer Ben Geier wrote.


"How exactly, then, has Barra emerged with her reputation almost intact? A simple combination of honesty, humbleness, and a seemingly sincere desire to fundamentally change the errors that led to the problems she's faced."


Geier also drew a contrast between the way Barra presented the candid findings of the report and the way BP Petroleum CEO Tony Hayward responded in 2010 to that company's Deepwater Horizon oil spill in the Gulf of Mexico.


"Barra has made a practice of saying that she doesn't want GM to 'move past' the ignition switch scandal, or to 'put it behind' the company. She doesn't want this to be a bad memory that fades into the background," Fortune said.

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"The BP executive always seemed more concerned with moving on with his life, with getting BP past the financial and reputational problems the accident caused, than with actually fixing the problems that led to the spill and helping those affected."


But GM's ignition switch problem continues, although it is generating less media coverage.


Those who haven't filed claims to Feinberg's compensation fund have until Jan. 31 to do so.


Through Dec. 24, Feinberg and his team found 42 surviving families eligible for settlements for the death of a loved one, out of 269 claims in that category.


Overall, the compensation fund has received 2,489 claims. It has found 100 claims eligible for some level of compensation, 306 ineligible and 568 that presented insufficient supporting evidence. Separately, 754 claims are still under review.

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