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GM Restructures Global Vehicle Engineering Operations

GM Restructures Global Vehicle Engineering Operations
By: Martin Blanc
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General Motors Company (GM) is finally gearing up to fix structural faults in the company after coming to the conclusion that internal problems were behind the delayed recall of GM cars running on faulty switches. The decade-long delay, which finally ended February this year, has seen GM being blamed for more than 30 car crashes and 13 deaths in the US.

The Changes

GM announced Tuesday that it was immediately splitting its Global Vehicle Engineering division into two new entities. The motivation is a growing need to deliver better safety and performance in GM vehicles.

John Calabrese, vice president of the now dismantled Global Vehicle Engineering division, along with Product Development Chief Mark Reuss is spearheading the change. Calabrese will retire after the transition is completed, which is expected to happen by August this year.

The Global Vehicle Engineering division is being split into two new units. The first unit, Global Product Integrity Organization, will be led by Ken Morris, 47. He will serve as vice president of the entity. Morris is currently serving as the executive director of Global Chassis Engineering.

The Global Product Integrity Organization will look exclusively into basic vehicle dynamics – including, but not limited to handling, steering and braking. Among other things, Morris will engineer the electrical and vehicle performance systems for GM vehicles.

Ken Kezler, 51, will be vice president for the other new unit, which is to be called Global Vehicle Components and Subsystems. Kezler, who is currently vice president for GM Europe Powertrain Engineering, will oversee the development of engineering components, engineering operations and advanced vehicle development, among other things.

Another major change announced involves the hiring of 35 additional product safety investigators. This, according to Reuss, will help GM look into complaints put forward by customers, dealers and regulators in a more timely and efficient manner.

The Human Resources department at GM is also seeing a change in leadership. John Quattrone, who previously led Human Resources for Product Development, will replace Melissa Howell as the new vice president for Global Human Resources. GM's Head of Public Relations and Global Public Policy, Selim Bingol, will be replaced by current Cadillac chief Bob Ferguson.

“Just an organizational change is not going to solve everything,” said Reuss, while commenting on the changes. “We have to have the right people with the organization with the right leadership and with the right processes in place.”

According to Reuss, the current changes could well just be the tip of the iceberg, as GM will continue to bolster its operational and structural efficiency.

The Curious Case of John Calabrese's Retirement

Calabrese was appointed vice president of Global Vehicle Engineering in 2011 following 30 years of service to the company. He had started his career at GM in 1981 as an experimental engineer, and has since proved his brilliance in many leadership roles in the engineering and purchasing functions of the company.

Therefore, it comes as a surprise that after managing the all-important split of GM’s Global Vehicle Engineering Operations, he is going to abruptly end his career at the nation’s largest automaker in August.

While Reuss stated that Calabrese’s decision to retire is personal and in no way connected to the vehicle recall, court records from a lawsuit deposition do hint at the possibility of such a connection.

An internal investigation led by Jim Federico, GM's Engineering executive, had been actively investigating the ignition switch problem back in 2011. The investigation concluded without decisive results. If Federico was reporting to a senior authority, it had to be Calabrese, who had joined as Vice President of Global Vehicle Engineering that year, according to company records. However no conclusive evidence of Federico's meetings (if there is any) with Calabrese has been found thus far.

Outlook

Currently, GM is being investigated by the US Department of Justice, Congress, and the National Highway Traffic Safety Administration (NHTSA). It also faces an internal probe led by lawyer Tony Valukas over its failure to respond to customers' complaints regarding the faulty ignition switches installed in its cars.

From battling it out in courts to making arrangements to fix 2.6 million cars that will cost the automaker over $1.3 billion, GM has been taking fire on all fronts. The decision to revamp operations linked to vehicle safety and performance is therefore a positive development for the auto maker.

The company does not fear a slowdown in sales following the recall, mainly as the recalled cars have all been discontinued. Analysts at Edmunds.com concur and so does Dan Ammann, President of GM China, who testified to GM’s healthy performance in China in the ongoing Beijing auto show.

GM closed up 0.74% yesterday, but is down over 5% since February this year – the point when recall-related issues hit GM in full force.

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