The authenticity of prepared remarks made by General Motors chief executive officer Mary Barra — voiced Thursday when the automaker released its internal investigation into the botched ignition switch recall — varies depending on the perspective of the analyst, consultant or lawmaker.

But one public relations consultant told Auto Remarketing that Barra missed the chance to address one important constituency — GM’s franchised dealers who are on the front lines of not only repairing recalled vehicles, but also dealing with possible public backlash about how the OEM fumbled the recall of older, discontinued vehicles that had faulty ignition switches that reportedly led to more than a dozen deaths.

David Johnson specializes in crisis communications and is chief executive officer of Strategic Vision, an Atlanta-based public relations and branding agency.

Johnson contends that GM has a long way to go in rebuilding its reputation because the public and others will be skeptical of the results of the internal investigation.

When asked by Auto Remarketing, Johnson said Barra has failed to address GM franchised dealers in her initial responses to the recall. Barra also didn’t reference dealers specifically during her prepared remarks on Thursday.

“I would recommend addressing them directly through video meetings with GM in which Barra explains in detail the way GM is handling this, reassuring the dealers the problems with the cars have been dealt with and they can sell the cars with confidence. Also let the dealers ask any questions that they desire addressed,” Johnson said.

“Then I would recommend more two-way communications between GM and the dealers. The dealers must feel confident with GM and be able to address issues consumers have. This means full disclosure and transparency with dealers,” he went on to say.

Employee Terminations and Victim Compensation

During her town-hall style employee address at the GM Vehicle Engineering Center in Warren, Mich., Barra did confirm 15 individuals who were determined to have acted inappropriately are no longer with the company. She also mentioned disciplinary actions have been taken against five other employees as a result of findings from the investigation completed by former U.S. attorney Anton Valukas.

“We have also made a number of personnel decisions. Some of these are tough calls, as you can well appreciate, and we held off making moves until this investigation was complete. But with the facts before us, we felt it was important to make a number of changes, and we have already done so,” Barra said.

“Fifteen individuals who we determined to have acted inappropriately are no longer with the company. Some were removed because of what we consider misconduct or incompetence. Others have been relieved because they simply didn't do enough: They didn’t take responsibility; didn’t act with any sense of urgency,” she continued.

“Disciplinary actions have been taken against five additional people as well.  With these moves, I feel we have addressed the personnel issues in this matter,” Barra went on to say.

Furthermore, Barra said GM will implement a compensation program for those who have lost loved ones or who have suffered serious physical injuries as the result of an ignition switch failure in recently recalled vehicles.

“We are taking responsibility for what has happened by taking steps to treat these victims and their families with compassion, decency and fairness,” Barra said. “We made serious mistakes in the past and as a result we’re making significant changes in our company to ensure they never happen again.”

That program will be independently administered by Kenneth Feinberg. GM explained the program is expected to cover approximately 1.6 million model-year 2003-2007 recalled vehicles manufactured with an ignition switch defect and approximately 1 million model year 2008-2011 recalled vehicles that may have been repaired with a recalled ignition switch.

Pending the independent administrator’s development of final guidelines for the compensation program, GM currently expects the program will begin to accept claims on Aug. 1.

Barra noted that it is the OEM’s understanding that the administrator’s final compensation program guidelines will be developed in the coming weeks and will include details on where and how to apply for compensation.

Kelley Blue Book senior analyst Karl Brauer called the compensation package “the right thing to do even if GM is technically shielded from liability as a result of its restructuring in 2009.”

Brauer continued by saying, “Mary’s speech was a clear rallying cry to GM’s employees worldwide. She effectively balanced her pride in the company’s current product and performance against the need to do better in the key areas of safety, internal communication and accountability.

“Mary has consistently shown a genuine interest in addressing GM’s internal issues while also taking concrete steps to effect these changes. Seeing the automaker through this crisis would be difficult for any CEO, but thus far Mary has shown an impressive combination of leadership, empathy and resilience.”

Cobalt Trade Activity

Here’s another dealer-oriented twist to the ignition switch story. Ahead of Thursday’s investigation announcement, the team of data analysts at Edmunds.com looked at how Chevrolet Cobalt owners have behaved since the recalls were first announced in February. Edmunds.com found that the recalls may actually be helping to turn Cobalt owners into new-vehicle buyers — and GM buyers, at that.

Here are four conclusions Edmunds.com discovered:

• During the period from March through May, there were 21 percent more Cobalt trade-ins (buying new vehicles) than in the same period in 2013. 

• It also seems that those former Cobalt owners are staying in the General Motors family. In May, 49 percent of people trading in a Cobalt for a new vehicle purchased a GM product. Analysts indicated that’s a higher automaker loyalty rate than before the recalls (and up from 47.5 percent in May 2013.)

• 46 percent of owners who traded in their Cobalt in May bought a new Chevrolet. That’s the highest brand loyalty rate since October 2012.

• The most popular car purchased with a Cobalt trade-in is the Chevrolet Cruze. In May, 22 percent of Cobalts traded in were exchanged for Cruzes. Edmunds.com pointed out that perhaps the level helped account for the 40-percent Cruze sales lift in May.

“The data suggests that for the most part, recalls have not discouraged Cobalt owners’ loyalty to GM and Chevy,” Edmunds.com senior analyst Jessica Caldwell said.

“GM has done a good job communicating new car deals to affected Cobalt owners, many of whom were probably getting close to buying a new car anyway. These deals look very appealing to outgoing Cobalt owners, especially if they personally haven’t had major problems with their GM vehicles in the past,” Caldwell went on to say.

While franchised dealers couldn’t activity market the incentive, the automaker is offering $500 to owners of vehicles involved in the recall toward the purchase or lease of a new GM vehicle.

Not Satisfied on Capitol Hill

If dealers have the opportunity to question Barra directly as Johnson recommended, they’ll have to get in line.

Sen. Claire McCaskill, chairman of the Consumer Protection Subcommittee who previously grilled Barra during a U.S. Senate hearing this spring, announced that she will hold a follow-up hearing later this summer despite the release of GM’s internal investigation

“I’m going to reserve judgment until I can take a closer look at the report — which I expect to find comprehensive and thorough — and I’m looking forward to getting a full briefing from Mr. Valukas,” said McCaskill, a Democrat from Missouri.  

“I won’t be letting GM leadership, or federal regulators, escape accountability for these tragedies. That’s why I'll be holding a follow-up hearing later this summer to address unanswered questions. The families of those affected deserve no less,” McCaskill went on to say.

GM chairman Tim Solso said the automaker’s investigation confirmed that Barra, executive vice president and general counsel Mike Millikin as well as executive vice president of global product development, purchasing and supply chain Mark Reuss did not learn about the ignition switch safety issues and the delay in addressing them until after the decision to issue a recall was made on Jan. 31.

Still, Sen. Richard Blumenthal has more questions.

“The GM public relations campaign is pitching this report as an independent review. In truth, it seems like the best report money can buy. It absolves upper management, denies deliberate wrongdoing, and dismisses corporate culpability,” said Blumenthal, a Connecticut Democrat who wanted all of these recall units parked until repaired.

“By firing 15 people and committing definitively to establish a compensation fund, GM has taken more steps than it has been willing to do in the past, but today’s public relations campaign continues to leave critical questions unanswered. Most significantly, CEO Mary Barra could not answer why the defective ignition switch was changed but its number was kept the same,” he continued.

“Before accepting GM’s self-serving explanation that the cause was a failure of corporate silos or culture, rather than deliberate wrongdoing, I believe that federal investigators and law enforcement agencies must conduct an independent inquiry into GM’s conduct,” Blumenthal went on to say. “The Department of Justice must pursue a timely, vigorous criminal investigation. Congress must continue its inquiry, aggressively and promptly. And NHTSA must oversee the recall process to ensure more drivers are not harmed.”