After a dramatic comeback, GM crisis takes the company down
People in the automobile industry were focused on Capitol Hill Tuesday, when members of Congress grilled current GM CEO Mary Barra over how the company handled a problem with the ignition switch in a number of its models produced from 2003 to 2011. The defect apparently caused car engines and other components to turn off while on the road, including the passenger airbag. “It’s unclear what impact it will have on sales,” said John Taylor, chair of the Department of Marketing and Supply Chain Management at the Wayne State University’s School of Business Administration. “No doubt they may take some degree of reduced sales for some period.” However, he said, “I think the jury is still out on how they are perceived by consumers and how they respond to people who have had this problem.” Taylor said that one reason the companies in the automotive supply chain could be insulated from an impact related to a decline in GM sales is that most companies in that space are already operating at or close to full capacity. “All the suppliers are stretched to the max in terms of being able to meet demand. They’re all going all out right now and there is a lot of pressure to add capacity,” he said.
