by Jacques Gordon
This spring, top management at General Motors began dealing with a scandal that has prompted them to make big changes within the company. For over a decade, GM sold vehicles with a defect that was known to have caused crashes, some with fatalities. The scandal results from allegations that the company knew of the problem but chose not to fix the defect and may have intentionally hidden it from U.S. Transportation Department investigators and from the bankruptcy courts.
As of today, none of this has been proven yet. Since this happened at the ‘old’ GM, it remains to be seen what the ‘new’ company will ultimately be held accountable for, but GM has already reached a settlement with the Transportation Department that includes some fundamental changes within the company.
GM has created a new department called Global Vehicle Safety, and they have restructured their world-wide engineering operations to include a Global Product Integrity Unit. The former will focus mostly on identifying and resolving safety issues in existing vehicles, while the later will focus on identifying and resolving problems during vehicle development so they don’t reach the production line. The company is also taking steps to improve internal communications that affect vehicle safety and reporting, which they imply is the root cause of the defect and continued sale of a faulty product. Further damage control measures include firing 15 GM executives, including the engineer who designed the switch.
It’s hard not to draw parallels to the Ford Pinto scandal of the 1970s, when Ford was accused of deciding it would cost more to redesign the car to prevent gas tank ruptures in a rear-end collision than it would to defend against the resulting law suits. That accusation proved false, but Ford still paid dearly; all the automakers noticed, and product safety became a bigger part of the whole industry’s corporate culture. But that was a long time ago, and it seems the lesson may have been forgotten.
Each week a list of new recalls is posted on http://www.safecar.gov by the National Highway and Traffic Safety Administration (NHTSA). Each recall lists all the vehicles affected, the defect found, the consequences of that defect and the remedy offered by the manufacturer. Reading those recalls shows that auto makers really do work hard to meet today’s safety regulations.
For instance, Ford is recalling Ford Escapes built on specific dates because a door handle was not properly aligned during assembly and the doors may pop open while driving. That’s a production line problem, not a design defect, and the fix requires just a simple adjustment. At the other end of the spectrum, Nissan is recalling 2014 LEAF models built on specific dates because welds may be missing from a front structural member. This is also a production issue, not a design defect, and while the vehicles still function properly, they don’t meet federal crash performance standards. Nissan’s remedy: any vehicle without those welds will be replaced free of charge.
There are dozens of recalls every month involving cars, light and heavy trucks, motorcycles, buses, RVs and camper trailers…anything that wears a license plate. In most cases they’re dealt with efficiently, effectively, and with little public notice beyond the original announcement. But Ford, Audi and Toyota have all suffered in the market for allowing a real or perceived product defect to become a public scandal. The cost of GM’s latest scandal will likely go well beyond the $45 million they have already paid in government fines and the additional funds set aside for settling wrongful death lawsuits. No doubt the whole industry is paying attention. Maybe this time the lesson won’t be forgotten.
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