General Motors Ignition Switch Scandal - Case Study Example

General Motors Ignition Switch Scandal General Motors Ignition witch Scandal Introduction General Motors has been one of the most enduring companies in the history of the United States. The company has made iconic models and concept cars for many years. Its cars continue to getting the adoration and praises of many vehicle users. However, the corporation has been bedevilled by many safety issues, which include allegations that it is more concerned about corporate profits than the lives of its customers. The most recent problems concerned faults with the ignition systems that are linked to several deaths. Moreover, the company has been accused of covering up these facts in collusion with the NHTSA. The essay looks into past cases of ignition switch faults and what the company’s reaction was. It gives a recommendation concerning what should be done by the company in the future. Ignition Switch Scandals There is new evidence coming up regarding a cover-up by General Motors and government regulators. The cover-up is about ignition switch defects that are known to be fatal. Press releases show that hundreds of deaths occur from the resolve of management to save money and prevent automobile recall. All these endeavors are needless (Firth, 2011). This means that all the customers who bought an excess of 2.6 million vehicles that were later recalled by General Motors were at risk of death or fatal injury. The risk of serious injury and death is because the ignition switch can be mistakenly jerked from the “run” location, stopping the motor and other functionalities such as power steering and power breaks. The airbag system is also disabled. The result is a loss of control of the vehicle without the protection of airbags in case a crash occurs. Many of the linked crashes to ignition crashes are head-on collisions (Vlasic, 2011). With the growing scandals regarding ignition increase, GM recently recalled an extra 1.3 million cars for due to defects. These defects were claimed to potentially cause an immediate cut-off of power steering. The negligence by the company in failing to put the safety of its customers first is costing it a fortune. Many of the recalled vehicles were low-priced models owned by young people. Families can never replace a loved one dies due to any cause including GM car ignition problems. The company appears to focus more on cash than its customer’s welfare. Recently, a GM engineering project engineer ordered an investigation into an ignition defect stopped because the cost of tools and pieces were too high. He said that the proposed corrections were not proper business justifications. The choice of corporate profits over human lives shows the need for public health and safety. The importance of placing the company under public ownership is underscored paper in t. The working population in the business should be democratically controlled to avoid conflicting ideas. Classified documents show that both General Motors and the National Highway Traffic Safety Administration (NHTSA) were aware of the malfunction of ignition switches and their consequences. The NHTSA is a government watchdog. Both organizations knew that fatal crashes caused deaths because airbags did not deploy since the ignition switch was in the off position. Therefore, the company and the regulators hid these facts from the public. Worse yet, the company did not make any efforts to recall these vehicles for repair (Chen, 2009). Currently, General Motors admits that it knew about the faulty ignition problems on the Saturn ion model as far as 2001. The company, however, approved the production of the switches although the company’s specifications were not met. Customers complained a lot about the ignition switch in the Chevrolet Cobalt. Despite the fact that GM engineers proposed a corrective suggestion, management rejected it. Instead of feeling remorse over the ignition mistakes, the company gave dealers instructions. These instructions advised customers to avoid hanging heavy items on car rings of vehicles such as the Cobalt and other models (Høye, 2010). In 2006, GM ordered that the newly designed ignition switch be installed in the models from the 2007 model. Despite this change, the company did not give the new parts new part numbers which are a serious mistake. The use of the same part number is evidence of a cover-up by the business. In the outset, more evidence of the hazards increased. For example, in 2007, GM secretly met the NHTSA. The agenda was the fatal accident in 2005 in which airbags did not deploy. The ignition key was found in the “accessory” position after the accident occurred. Despite the seriousness of the situation, GM did not remember any vehicle. Moreover, the meetings of that meeting have been a closely guarded secret until now (Zimmermann, 2011). Officials from General Motors claim that they are only aware of 13 fatalities due to the ignition key defect. The actual figure is suspected to be higher than that. For example, there are claims that the NHTSA received an excess of 260 complaints from customers about GM vehicles whose engines shut off while the vehicle was being driven. When the consumer group called Centre for Auto Safety found 303 deaths in the years ranging 2002 and 2012, involved the Cobalt and Ion where the airbags failed to deploy (Johnson, 2012). The cover-up by General Motors and the government has caused serious loss of human lives. GM responded to families of deceased victims with lies and callousness. For example, GM responded to the family of a 23-year-old daughter who passed away in 2010 in a Chevrolet Cobalt. The airbags failed to deploy. GM said that her death was not related to the defects. In another example, GM issued threats to the family of a crash victim. They told the family that they would sue them for advocate fees if they did press the suit against the company. The collusion between the government and the NHTSA portrays the government as an arm of big business. This relationship between regulatory bodies and the corporations they are supposed to regulate is immoral. For example, in December 2013, the head of the NHTSA David Strickland tendered his resignation. He decided to be employed by a law firm that lobbies on behalf of the automobile industry. Similar corruption tendencies occurred in relation to BP in the Gulf oil spill and between regulators in the banking industry and Wall Street. Such cases are seen in numerous other sectors of the economy. The effects of the negligence by both the regulators and GM are very serious. It is to such an extent that Representatives of the House and Senate had hearings regarding the GM cover-up. The congressman from Michigan called Fred Upton, who was the chairman of the House Committee studying the delayed recall of vehicles had grave comments about GM. He said that the company and NHTSA failed to see the full picture. The same tired and false excuse was used to hide the foreknowledge of the government of the tragedies that arose on 9/11 plus the Boston Marathon bombings. The Centre for Responsive politics claims that Upton’s campaigns have been supported by a GM political action committee since 1989 for a sum of $73,750. Upton’s political campaign machine was also boosted by an excess of $100,000 from political action committee of the Ford Motor Company and its employees. There has been a relentless drive by both Democrats and Republicans to dismantle the safety regulations established earlier. These regulations have been as a result of the struggles of the working class. In the forced bankruptcy of GM that occurred in 2009 led to the restructuring of GM. It made the state the majority shareholder in the company. The condition went on until November 2010. The Obama administration instituted a clause that recognized GM as harmless from product liability legal suits arising from prior to July 2009. The situation occurred when GM and the government were aware of the fatalities that had occurred due to the effects of defective ignition switches (Delgrossi, 2012). The above facts show the lawlessness and criminal behavior that have become common in contemporary capitalism. These crimes are not aberrations. They are hard-coded in the private ownership system of the manufacture amenities as well as the production for profit purposes. Production is driven by the unyielding demands of Wall Street investors for maximum returns on investments. This makes companies such as GM take for the granted safety that are contrary to their bottom lines. In other words, all those involved in producing and allowing dangerous automobiles to remain on the road and cause fatalities must be prosecuted and sentenced in a law court. Moreover, the families of the victims must be fully compensated. In order to address the inevitable security issues, a question that enquires in whose interest is society organized arises. Since people live in a complex and highly technological society, scientific planning and quality control creates the need for public ownership and democratic control of business. The situation can be rectified, and reinstated by use of an independent political movement, in the society. The movement should base its ideas on socialism instead of capitalism (NHTSA, 2007). Some people claim that it is of no consequence how well the case for public ownership is made. The reason is that all the costs incurred by General Motors and its shareholders will be passed on to the consumers, workers and communities that rely on General Motors. Therefore, the whole nation is affected. Many people wonder for whom the regulators are working for in the first instance. They wonder who else they can trust if the government regulators fail in their job to maintain public trust. On February 13th, 2014, alarms were raised at the Centre for Auto Safety when General Motors announced a recall. The recall involved an excess of 780,000 Cobalt vehicles and Pontiac G5s 2005-2007 models that had faulty ignition switches. The ignition switches were sensitive to the extent that a slight knock or heavy key ring could turn off the engine, brakes and prevent the vehicles from inflating. It would lead to the inability to protect the driver and front passengers in case of a crash (Ludden, 2007). A fortnight later, General Motors added 842,000 Ion compacts of 2003 to 2007 models and Chevrolets HHR SUVs, Pontiac Solstice and Saturn Sky sports car of models of 2006 to 2007 to its recall list. The problems involved the faulty ignition key switches. The company now revised the number of fatalities due to the deadly ignition switches up to twelve. The revelation of the prolonged delay in calling for a recall of vehicles with faulty ignition switch had an aura of scandal to it (Høye, 2010). Clarence Ditlow was the long-time chief executive of Centre for Auto Safety was no stranger to the auto industry controversies and cover-ups. In 1978, he was part of the research team that led to the recall of Ford Pintos. The gas tank designs of these vehicles were faulty and resulted in the fiery deaths of 27 people. These fatalities had to occur for the company to accept that the faulty gas tank design was the cause of the problem. In May 2000, he helped investigate the sales returns of Explorers, Mercury Mountaineers and Navajos that were fitted with Firestone tires. These tires routinely failed as the tread separated (Delgrossi, 2012). GM recently told safety regulators that it had received reports about the faulty ignition switches back in 2001. However, the company thought that it fixed the problem with the design change of 2006. According to the GM timeline of events, the NHTSA knew of the faulty ignition switches and airbag problems as far back as 2007. It, however, did not order for a recall of the vehicles. It is surprising fact that a recall was not ordered despite the National Highway Traffic Safety Administration being the industry regulators. GM’s delayed response in dealing with the dangerous defects of six vehicle models has created a lot of problems. For example, the company and its new chief executive officers have faced a mountain of economic, legal and political implications. The company survived the bankruptcy of the recession period due to the help of the federal government. The federal government assistance helped GM bounce back to profitability long before the end of the recession. Currently, however, it may face hundreds of millions of dollars or more in repair costs of the 1.6 million vehicles recalled covering civil and criminal charges and lawsuits by families of the diseased. Moreover, the recall of the vehicles has sparked off investigations by federal regulators, two Congress committees and the Justice Department. During a press conference in Detroit recently, Mary T. Barra, the CEO of GM apologized for what had happened and vowed to get to the bottom of the scandal. She acknowledged the seriousness of the loss of lives and the affected families. GM is not the only company having legal issues concerning its vehicles. The Justice Department recently announced that Toyota should refund $1.2 billion to a calm down the research involving concerning the treatment of the reports of unintended acceleration of its vehicles and the recalls that began in 2009. This settlement is the largest penalty ever levied on an automobile company ever in the United States. Clarence Ditlow has been among the earliest people who challenged the safety record of the U.S. car manufacturers and campaigned for safety features such as the seatbelt (Delgrossi, 2012). Despite the fact that it will take a long period of time for investigators to know the origins of the controversy involving GM’s recall, Ditlow claims that the vehicle manufacturer knew of the ignition switch problem in 2001 when the Saturn was in the production line before hitting the market. He notes that the company elected to keep quiet about the problem until the model was already launched and on the road. When the auto safety center became aware of the GM case, it got early warning reporting data on the defects and complaints about vehicles as well as special accident research reports from the website of the NHTSA. The auto safety center started to look for information that would indicate the scope of the problem and the role the NHTSA might have played. They first realized that there were several death claims associated with the ignition key defect. These claims were filed with GM. They then found two cases that exposed the seriousness of the problem in Maryland and Wisconsin in October 2006. A defective 2005 Cobalt was also involved. In July 2005, a young girl named Amber Marie Rose died in a crash as she drove a 2005 Cobalt model. In this crash, the airbags failed. In Wisconsin, two other women were killed in a similar accident in October 2006, which involved similar defective 2005 Cobalt. During a meeting with GM representatives in March 2007, the NHTSA brought up the Maryland accident in Washington. The information is acquired from GM. However, there was no indication of a push by the NHTSA for a full-blown investigation (NHTSA, 2007). To promote their research further, Ditlow and his colleagues sought the help of Friedman Research Corporation, which conducts sophisticated research of raw data in the NHTSA Fatal Analysis Reporting System. Ditlow requested Friedman to look into the airbag failures of 2003 and 2012 that involved the Cobalt and Saturn Ions. These two models were the largest sellers among the six recalled models. Friedman found that 303 people had died in accidents involving GM vehicles whose airbags failed to deploy. The research did not look into the actual cause of the accidents although the findings. Recommendations The losses of human lives and due to negligence of automobile companies is common today. The NHTSA should increase efforts to ensure that these companies follow all laws. The companies should have a paradigm shift where they start focusing on the welfare of the customers rather than the returns on investments. In other words, automobile companies should learn from companies that focus on customer satisfaction such as Amazon.com. Conclusion Bad ignition key switches have caused numerous deaths in the United States and abroad. It is highly recommended that companies change their priorities and focus on the safety of their customers on the road. Faulty ignition switches cause the vehicle’s engine to stop suddenly. It disables airbags, brakes and leads to death because airbags fail to deploy in case of a crash. The regulatory body, NHTSA should not collude with vehicle manufacturers to cover up mistakes. These scandals should motivate the company to take a new turn and focus on responsibility to customers rather than earning more money. Reference List Dong Xiang Chen, J. L. 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