(Updates with GM lobbying strategy in the eighth paragraph. For more GM recall news: See TOP EXT9 <GO>.)
April 3 (Bloomberg) -- General Motors Co. has retained crisis-communications expert Jeff Eller as it builds a team to help respond to the recall of small cars with faulty ignition switches tied to 13 deaths.
Greg Martin, a spokesman for the Detroit-based company, confirmed that Eller will join the team guiding the automaker’s response to the recall. Eller had been director of media affairs in the Clinton White House, according to his LinkedIn page.
GM is adding experts with a history of managing crisis situations as it seeks to repair its reputation. This week, the company hired Kenneth Feinberg, the lawyer who managed funds for victims of the Sept. 11, 2001, terrorist attacks, to consider whether to compensate crash victims. Jenner & Block LLC Chairman Anton Valukas, who prepared the report on the Lehman Brothers Holdings’ bankruptcy, recently joined GM to co-lead the internal probe of who knew what and when, about the ignition flaws.
“As we have from the start, we are drawing upon those who have deep experience and expertise in these matters,” Martin, the GM spokesman, said in an e-mail today.
Chief Executive Officer Mary Barra fielded pointed questions and accusations yesterday from U.S. senators during a panel holding a hearing into why it took the company so long to recall 2.59 million small cars with potentially faulty parts. One senator said GM had a “culture of coverup” and another predicted it may face criminal liability.
Barra will have to appear before the Senate panel again, said U.S. Senator Dean Heller of Nevada.
“We haven’t heard the end of this yet,” said Heller, the top Republican on the Senate Commerce subcommittee probing the recall. “They’re going to have to come back, and Barra said she would.”
Barra was joined at the hearings this week by Mark Reuss, head of product development; Grace Lieblein, head of purchasing; and Bob Ferguson, head of Cadillac and former head of the company’s lobbying office. She was also joined by Michael Millikin, GM’s general counsel, and Selim Bingol, head of both communication and public policy.
“She’s put her A-Team on this,” Jeffrey Sonnenfeld, a business professor at Yale University, said in a telephone interview. “On top of that they’ve brought in these very clean, independent-minded outsiders whose reputations are way too strong to worry about needing to cater to any imperative to protect rather than to surface the truth.”
GM rose 1.6 percent to $35.44 at the close in New York.
By hiring Eller, GM adds a Washington insider with experience in how Congress handles an automotive crisis. He worked on the Bridgestone Firestone recall related to tires on Ford Explorer sport-utility vehicles that lead to a new federal law in 2000. In this case, he’ll have on his side GM’s already- large presence in the nation’s Capitol.
GM spent more money than any other automaker last year nurturing ties with the U.S. Congress and federal government and was among the top 50 spenders of any group on lobbying in Washington, according to the Center for Responsive Politics, a Washington-based non-profit. The company kept a stable of 48 lobbyists on call, paying them $8.82 million.
The team included 12 in-house lobbyists plus at least nine outside firms, including one headed by Kenneth Duberstein, a former chief of staff in the Reagan White House. The full cadre of lobbyists also included former Senator Don Nickles from Oklahoma, and two former members of the U.S. House of Representatives, Deborah Pryce of Ohio and Henry Bonilla of Texas. All three are Republicans.
The biggest U.S. automaker’s internal and external lobbyists are in research mode now, reaching out to members on the committees that pose the biggest risks to the company, according to a person familiar with the operation.
Those getting calls include members of the Senate Commerce, Science and Transportation Committee, the House Energy and Commerce Committee and the House Oversight and Government Reform Committee, said the person, who isn’t authorized to discuss details of the lobby effort. It includes determining the positions of members, their concerns and problems, and whether they represent family members of victims, the person said.
The information from the lobbying team will be critical to Eller and others in the company as they anticipate what lawmakers might focus on in upcoming hearings and try to understand which members are likely to take tougher action.
GM could also get some help from the Alliance of Automobile Manufacturers Inc., a Washington-based trade group that includes most major auto companies and lobbies Congress.
“The primary concern is that some members would like a rush to judgment,” said Wade Newton, the group’s communications director.
Already, he said, legislation is being introduced that would impact the industry.
“In many cases, members are just reintroducing old bills with provisions that appear to have little or no applicability to the current situation,” he said.
Eller worked on the Clinton-Gore campaign team in 1992 before serving in the White House, according to his LinkedIn page. In 1994, he joined Public Strategies, a consulting firm with experience in public relations, according to a bio that had been on the company’s website earlier today and later appeared to have been removed. Eller left Public Strategies at the end of last month, said Rebecca Ballard, a spokeswoman for Hill and Knowlton.
“They’ve made a very smart decision,” said Joe Lockhart, a former spokesman for the Clinton White House who worked on several political campaigns with Eller. “Jeff’s very smart, very calm under pressure and most importantly understands the need to aggressively tell his clients story in an increasingly difficult media environment.”
A lengthy 1994 Forbes magazine article about his days in the White House describes him as possibly the “the most linked, multiplexed, plugged-in human on the planet -- or at least in politics.”
--With assistance from Laura Litvan, Annie Linskey and Phil Mattingly in Washington.