GM again forced to apologize after PR flub

General Motors (GM) is again dealing with a public relations crisis of its own making.

According to media reports, North America's largest automaker, sent out recall notices to families of people who were killed in accidents caused by a defective ignition switch. The problem is blamed for 13 deaths that the company failed to address for more than a decade. Detroit-based GM has apologized for its actions.

"Notices should not have been sent," said Greg A. Martin, a spokesman for GM, in an email. "We are deeply sorry that they were. ...We'll do our best to make sure that it doesn't happen again."

Ernest DelBuono, senior vice president at the public relations firm LEVICK, said that companies in the middle of a maelstrom of negative publicity have a "tendency not to thinks things through and pay attention to detail."

"For members of the families, no apology is going to be enough," he added. "All they can do is continue to show their regret for what has happened."

When news of the GM recall surfaced earlier this year, crisis communications experts faulted the automaker's media response, saying it failed to sufficiently express sympathy for victims of the accidents. For example, CEO Mary Barra told employees in a video posted online that "Something went wrong with our process in this instance, and terrible things happened." A month later, Barra was more contrite, telling Congress that the automaker was "deeply sorry" for the pain it caused for families of the victim.

Wall Street appeared to shrug off today's news. GM shares rose 3.6 percent on the day to close at $36.52. The company's stock has slumped about 11 percent since the start of the year. Still, most analysts continue to recommend the stock. The average 52-week price target is $43.63, about 20 percent higher than where it currently trades.

At least for now, GM sales also don't appear to have been affected by the scandal that has engulfed the company in recent months. The company sold 1.19 million vehicles in May, an increase of about 18 percent over the previous year. Consumers seem willing to cut GM some slack since most of the models affected by the recalls are no longer in production.

"Consumers are going to respond based on their experience with the brand," DelBuono said, adding that when people buy a car "they are going to make a practical decision as opposed to an emotional one."

GM is expected Thursday to release details of an internal investigation into why it took the automaker more than a decade to recall vehicles linked to the accidents. The issue is also being investigated by Congress and the U.S. Department of Justice.

  • Jonathan Berr

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