GM recalls reflect company "living on the brink of disaster," bailout leader says

|By:, SA News Editor

Harry Wilson, who helped lead the White House’s auto task force during the General Motors (GM) and Chrysler bankruptcies, called GM’s recall crisis "emblematic” of deeper cultural problems at the company.

Wilson told a Brookings Institute panel that the nearly-decade long delay in recalling 2.6M cars smacks of a penny-wise culture “driven by a company living on the brink of disaster for many years.”

While GM is trying to reverse that culture, it still suffers from lack of communication and sharing information, he said - “a problem with GM for decades that [CEO Mary Barra] needs to fix.”

Fiat Chrysler (FIATY) CEO Sergio Marchionne told the panel it was unfair that the government helped GM emerge from bankruptcy with lots of cash and little debt while Chrysler had to take new loans, but that Chrysler’s debt burden was a motivating factor that could have helped speed a change in GM's corporate culture - “When you are broke, you change your ways a lot faster.”