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Brett Emison
Brett Emison
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GM Board Asleep at the Wheel on Safety

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General MotorsNew York Times article found that GM’s board of directors was slow in reacting to the safety crisis that resulted in recalling almost 30 million vehicles.  Safety, it turns out, was rarely discussed at the highest levels of the company.  Said GM’s chairman of the board of the initial ignition switch recalls in February 2012:

“I can’t remember the specifics.  It was a large recall.  There were probably cost estimates.”

There were probably cost estimates.”  Hundreds of crashes.  13 confirmed deaths.  Potentially hundreds of more deaths.  And the best GM’s chairman of the board can recall is that “[t]here were probably cost estimates.”

The Times article found that only is the GM board “confronting the fact that it was blindsided by years of corporate misconduct that has set off the most serious safety crisis in the company’s history.  In addition to hundreds of lawsuits over the defective GM ignition switches, GM shareholders have filed lawsuits against current and former directors for failing to to properly oversee management of the company.  One suit alleged that board members are “guilty of a sustained and systemic failure” and “set up a system that is calculated not to inform them about safety issues.”

The Times piece is not the first critique of GM’s management.  Earlier this year, AP auto writer Tom Krisher documented how safety took a backseat at General Motors.  GM’s structure and its culture that placed profits and cost savings over safety is expected to be a prime target of a report expected from the US Attorney Anton Valukas.

“What’s a higher priority than product safety?” asks Yale University management and law professor Jonathan Macey….  “The organization chart does obviously reflect a company’s priorities.”

– Before recalls, safety was low in GM hierarchy [Krisher via The Kansas City Star]

The list of vehicles GM has recalled this year because of the ignition switch problems has continued to grow and includes:

  • Buick LaCrosse – 2005-2009
  • Buick Lucerne – 2006-2011
  • Buick Regal LS and GS – 2004-2005
  • Cadillac Deville – 2000-2005
  • Cadillac DTS – 2004-2011
  • Chevrolet Camaro – 2010-2014
  • Chevrolet Cobalt – 2005-2010
  • Chevy HHR – 2006-2011
  • Chevy Impala – 2006-2014
  • Chevy Monte Carlo – 2006-2008
  • Opel GT – 2007
  • Pontiac G5 – 2007-2010
  • Pontiac Pursuit – 2005-2006
  • Pontiac Solstice – 2006-2010
  • Saturn Ion – 2003-2007
  • Saturn Sky – 2006-2011

GM could have fixed the defect for less than a dollar.  One estimate put the cost at just 57 cents.  But GM did not fix the problem because it determined that the fix cost too much.  It was cheaper to let people die.  And how many people died?  GM says 13 people died.

An independent review by Reuters news service says at least 74 people died from the ignition defect.  Other estimates put the number at 300 or more deaths.  And according to GM’s chairman, “there were probably cost estimates.”

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