GM Recall: Answers Hiding In Plain Sight?

And all the investigations, all of Lutz's men/ couldn't figure out who was in charge of things then.

And all the investigations, all of Lutz’s men, couldn’t figure out who was in charge of things then…

In the wake of General Motors’ and Mary Barra’s public lambasting last week, at the hands Congress and Comedy alike, a new sense of gravity now surrounds the still-unfolding scandal. Combined with the shocking facts surrounding the defect itself, Barra’s performance paints a picture of a GM unable to establish basic accountability without outside intervention. In a recent interview with New York Magazine, and sounding more like a corporate consultant than radical activist, Ralph Nader advises Barra to act relentlessly, arguing:

Look what it’s costing them: It’s already at $750 million and growing. What’s it cost them in lost sales? All kinds of stuff spills out, even if it’s not directly related to the ignition switch. She knows that it’s just going to get worse and worse. There are going to be whistle-blowers, and plain envelopes, especially when the press sees prizes — they see Polk Awards, Pulitzers, and so on — once they get into that realm, there’s no stopping it.

This has all the elements. It’s a cocktail that gets it going. It is very difficult to get the press into that realm — take it from someone who knows from over the years.

Ralph’s right: Barra’s unconvincing performance last week has stepped up pressure to find the answers she wouldn’t provide, and there’s no knowing where some tough digging could lead. After all, there are answers that Barra refused to give still hiding in (relatively) plain sight. With the help of a single book and internet access, anyone can find insight into the problems that are stumping Congress, the media and Mary Barra herself… Let’s not wait for the investigation, shall we?

In his book “Car Guys vs Bean Counters: The Battle for the Soul Of American Business” Bob Lutz describes being asked to return to General Motors in 2001 to accomplish three basic tasks:

Phase One. Exert my influence to improve products already in our pipeline and use my communications skills and reputation with the media to have them seen in the best possible light.

Phase Two. Lead the creation of the future portfolio: cars and trucks of unsurpassed design excellence and characteristics. Cars and trucks so good so desirable, that customers would pay full price and wait for delivery if necessary.

Phase Three. Permanently change the culture of the company, especially around design, planning and engineering, in such a way that mediocrity (or the dreaded adjective “lackluster,” so frequently applied to new GM cars) would be permanently banished.

From September of 2001 until his retirement in 2010, Bob Lutz worked from this game plan as GM’s Vice Chairman, first of Marketing Communications and then as Special Adviser Design and Product Development. Working under Lutz were GM’s Vehicle Line Executives (VLEs), or

“very powerful senior executives, usually engineers, who act as program managers for individual vehicle programs as they progress through the gestation process from sketch all the way to production. GM had refined the VLE system and had, as was so frequently the case, gone the extra mile in conducting elaborate psychological testing to make sure these men and women were up to the responsibility. But the VLEs, mostly men with two excellent women, were by and large a fine and experienced group; and dedicated to accomplishing their mission.”

One of those women VLEs, Lori Queen, was the VLE for the Delta small cars (Cobalt/G5/HHR) and the Kappa roadsters (Solstice/Sky) before becoming VLE for GM’s small and midsized trucks. With ultimate cost responsibility for both programs, and (according to Lutz) access to bonus incentives for meeting cost targets, the VLE position was first  conceived as a way to create advocacy and accountability for vehicle programs. Since accountability is precisely what GM appears to be in dire need of, Ms Queen is an obvious starting point for any investigation into this mystery… though her name has only briefly surfaced so far in the mainstream media.

When you start searching online for stories about Lori Queen, several things jump out fairly fast:

1: In 2006, the year of the ignition switch “stealth redesign,” Lori Queen lambasted Consumer Reports for its criticism of the Cobalt she lead development of. Breaking longstanding practice, Queen called Consumer Report “the most unprofessional group of people I have ever worked with… They are totally nonobjective and go to great extremes to paint a picture for their paid subscription readers, who primarily buy Japanese cars. They don’t consider price or price differences, they don’t consider model mix or consumer preferences, they buy the cheapest car they can find (generally) and then base their opinions on a limited sample.”

2: Lori Queen is married to Jim Queen, who was a GM VP Engineering (first in North America than with Global responsibility) from 2001 until both the Queens retired in 2009. Jim Queen was featured in Automotive News in 2003 and 2006, first pushing for engineering cost cuts and then bragging about the billion-dollar savings he’d won for GM.

These first impressions show the kind of “cost culture” that GM is now trying to distance itself from, but nothing to link the Queens directly to any apparent wrongdoing. For that one must dig a little deeper. Hidden within the depths of the Automotive News archives, in a story from April 2005, comes proof that GM executives were actively trying to reduce parts changes for  the recalled vehicle projects. Yes, Lori Queen was spearheading an initiative called “Big 4,” in which “GM project managers serve as strict taskmasters to make sure suppliers adhere to vehicle launch schedules and keep part design changes to a minimum.” The four points in “Big 4” were:

1. Vehicle production designs must be released to suppliers on time.

2. Parts must be tested on time to ensure that they can be properly integrated.

3. Problems must be resolved quickly, instead of waiting until late in the schedule. “We’re not going to sneak up on it and make 10 series of changes,” Queen said.

4. Part validation must be completed on time to avoid what Queen calls the “constant churning of changing parts” that makes development schedules too long.

In her congressional testimony, Mary Barra was asked repeatedly how GM could have made or approved a part change without changing the part number, a key question in this investigation. Her answer was familiar: I want to know as much as you do, which is why I’m waiting on the investigation. What she did not at any point disclose was that GM actually had a program, called “Big 4,” aimed at pressuring engineers and suppliers to make fewer changes to parts… and that the VLE for the recalled vehicles was its pioneer.  Surely this is a program that Barra would have been aware of in her years of engineering and production experience at GM, and surely she realizes that this is exactly the kind of information Congress was looking for.

The source of all this information gets to the heart of the problem: GM executives are open and transparent with the media when they have a positive story, such as Jim Queens’ billion-dollar savings or Lori Queen’s “Big 4 discipline,” but w hen the story is negative, they suddenly know nothing. Because automakers control all the information related to their business and products, the smartest defense is always to clam up. You can’t even get anything out of an auto executive by hauling them in front of congress… only their long-forgotten brags, lying dormant beneath the news cycle, hold the power to keep them accountable. For the auto media, long dependent on company access for stories, this is a liberating  realization: the key to your next big story might be hiding in your own archives.