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BCVol1-1782223Engineers at General Motors (GM) realized in 2009 that the ignition switch in thousands of its Chevrolet Cobalt sedans were faulty. If the ignition key were bumped or weighted down (e.g., by a heavy keychain), the ignition itself could fail, shutting off the engine and disabling the airbags. A memo dated that year makes clear that the company knew the problem existed. But it was only in 2014 that GM began to recall the defective models. In the meantime, at least 26 people died in accidents that appear directly attributable to the design flaw. Yet GM continued to deny responsibility or payments to the families of people killed in its flawed vehicles.
How can such willful misconduct occur, especially by a brand with a strong reputation as a trustworthy, American brand? Several factors appear to have created the terrible situation:

  • The engineers that discovered the defect did not have clear lines of communication with the legal department or other decision makers that might have shut down production immediately and recalled any cars on the road.
  • Two weeks after the discovery, GM entered into bankruptcy, due to the global economic recession. In a sense, the company appears to have been distracted by “bigger” problems.
  • Consumer complaints were gathered through various channels, including online, customer call centers, and dealerships. Because there was no central database, GM might not have recognized the extent of the problem.
  • Employees aware of the problem appeared determined to maintain reputations as team players, not be labeled negatively as whistle blowers.
  • The first fatality involved a drunken driver who was not wearing her seatbelt. Thus GM might have determined early on that the fault was not with the car, then failed to revise its opinion, even as more evidence mounted.

More broadly, GM functions in an industry in which there is no such thing as complete safety. Driving is inherently risky, and no car can be completely immune from danger. Thus GM might have conducted an analysis that suggested the problem was an acceptable trade-off for the other benefits of the car. The Chevrolet Cobalt is one of GM’s lower priced lines, and perhaps the company assumed (mistakenly) that people were willing to take greater risks with their safety in exchange for a low price point.

Source: Hilary Stout, Bill Vlasic, Danielle Ivory, and Rebecca R. Ruiz, “General Motors Misled Grieving Families on a Lethal Flaw,” The New York Times, March 24, 2014, http://www.nytimes.com; Floyd Norris, “History Offers Other Examples of G.M.’s Behavior,” The New York Times, March 27, 2014, http://www.nytimes.com