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GM Recall Exposes Larger Issue with Company Culture

by Mikal C. Watts on 04/02/2014

GM’s inaction concerning a reported decade old problem that has blamed for at least 13 deaths has many questioning why the automaker failed to act sooner. The answer may lie in a corporate culture struggling to cut costs while buffing its image only to be at the mercy of the federal government for a financial lifeline a short time later. When GM engineers finally grasped the gravity of the inaction and defect, somebody in a decision making position chose to focus instead on the positive rather than reality.

A flawed ignition switch on 2.6 million compact cars is the root of a NHTSA investigation, several lawsuits across the country, hearings before the House and Senate and probable future fallout for the company. The faulty switches suddenly shut off the cars, stiffen the brakes and power steering while disabling air bags. The part to replace the switch costs ten dollars wholesale and takes less than an hour to repair.

GM discovered the problem as early as 2001 in a pre-production Saturn. In 2004, company engineers reported the switch could be turned off accidentally by a driver’s knee. By 2005, the company had multiple reports of stalling vehicles and had reached settlements with victims’ families shrouded in mystery. In 2007, a redesigned part was installed in new cars using the same part number as the previous defective model.

GM’s CEO released a video in January acknowledging the mistakes and admitted terrible things happened. There is still not an answer as to why.

An independent consultant with internal information on GM’s hiring practices and culture attributed it to a culture of no bad news and rewarded conformity.  Although the person who ignored the obvious problems and dismissed the potential events that are now unfolding may be discovered, the culture of a company that begged for federal dollars while placing millions of people in danger is a bigger issue that should be addressed.

At this time, GM is facing a criminal probe where penalties could be similar to the fines levied against Toyota for allegedly lying to the public about an unintended-acceleration problem. The fine in that case was $1.2 billion.

The severity of the recall has increased due to GM’s decade of inaction. The decision to work towards a positive reputation by placing valid defects on the backburner will ultimately hurt the company and public perception. GM’s operations only continued due to a taxpayer bailout during a time they were purposely concealing information of potential fatal defects to the same taxpayers. 

If a defective product has caused you injury, please contact the lawyers at Watts Guerra

Tags: Automotive Defects, General Motors

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