GM Recall — Bad Switches, Bad Relations, Bad Acts

by Searcy Denney Scarola Barnhart & Shipley
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Why is GM in so much trouble? Is it just about bad switches or improperly operating air bags; recalls of millions of vehicles? Isn’t about more than that? Isn’t it really about corporate attitude, corporate responsibility and corporate citizenship? This is not the first time that corporate America has placed consumers in the middle of cross-hairs of certain injury or death. And, it is not the first time for GM either.

We have plenty of lessons. Sadly the following represent a small percentage of the whole:

  • A company that discovers its medical device is little more than a bomb waiting to go off in people’s hearts… and decides not to tell anyone. (Guidant Heart Defibrillators, Medtronic Sprint Fidelis, Bjork-Shiley Heart Valve)
  • A pharmaceutical company that discovers its drug causes severe side effects in pediatric patients… and then spends hundreds of millions of dollars marketing to children. (J&J Propulsid)
  • A company that discovers its bulletproof vests are not so bulletproof and are defective… and then sells them anyway to be worn by law enforcement, the military, and the President of the United States. (Second Chance Body Armor)
  • A company that discovers rodent droppings are contaminating its food products… and then orders them re-cooked and sold anyway. (Peanut Corporation of America)
  • A car company that discovers that if it does not spend $11 per car to fix a defect, hundreds of people will be horribly burned… and decides it would be cheaper to let them burn. (Ford Pinto)

In fact, GM had its own exploding car – the Chevy Malibu. Did GM know the auto would explode? Yes.

Did GM consciously decide not to recall the Chevy Malibu and not to tell the public about the danger? Yes.

Did GM have a reason for not recalling the Chevy Malibu?

Yes. Chevy did the math and determined that to retrofit its vehicles and prevent the gas tanks from exploding would cost $8.59 per car. They believed the value of a person’s life was around $200,000 and that the design would kill about 500 people. The cost to fix the vehicles would be $8.59 per car. Gm rationalized that paying off 500 deaths would only cost them around $2.49 per car for every car they had on America’s roads. It was cheaper in the long run to let the people burn and pay off the claims. Here is a GM memo memorializing the “bean counting” and discovered decades after the fact because of a lawsuit filed by a plaintiff’s lawyer against GM:

We now find out that at the same time American taxpayers gave GM $10.5 billion and allowed them to discharge much of its corporate debt in bankruptcy, it was sending the American consumer defective vehicles. From developing evidence it seems GM knew of the fact they were getting defective ignition switches from their supplier, Delphi, and looked the other way. They also knew additional hazards were being caused by the switch defect…and looked the other way.

We recently have discovered that at the same time they knew about defective switches, GM was experiencing reports of malfunctioning air bags not deploying in high speed crashes. When the ignition switch shuts off, the air bags have no power and as a National Highway Transportation Safety Administration investigator reported in an email to his superiors that the front air bags did not deploy “in severe front crashes under circumstances where they would be expected to function and reduce injury levels.” His superiors decided there was insufficient data to determine it was a systemic problem.

Had someone put the defective switch together with the non-deploying air bags; someone other than GM; who knows how many injuries would have been avoided.

How does Corporate America justify things like “bean counting” people’s lives and being willing to consciously allow people to be injured or killed as long as the cost to “buy ‘em off” does not exceed the cost of a recall?

Lawrence Mitchell does a good job of explaining this in his book, Corporate Irresponsibility: America’s Newest Export (2001). Mr. Mitchell provides us with the reason Corporate America can rationalize killing people and it is the same reasons the US Supreme Court was wrong to allow corporations to contribute without limit to political campaigns:

“It’s not that we (humans) don’t make cost-benefit decisions all the time. We do. But there’s a difference between a human making those decisions and the same decisions made by a corporation… If we behave in a way that harms other people, we typically are not only aware of it but feel the pain of it as well.”

“Corporations may sometimes pay the costs, but they don’t experience them in the same way. GM and its executives had no experience of explaining to its customers their cars might explode and, short of being hauled into court, no experience of the need to apologize. In other words, they didn’t feel responsible because they didn’t experience the consequences of their decision to keep profits up at the expense of’ human life. How would GM’s executives react if they had to confront the Andersons or any of their other customers face to face? We don’t know; they might make the same decision. But they would make it with a more human understanding of its consequences, with a full appreciation of its costs.”

Corporate America is not human. Although filled with humans, it is an institution; with humans far-removed from the results of their actions and decisions they can place a value of burning someone up, paralyzing someone, or taking someone’s mother away from them. Corporate America cares about your money and getting your money; while avoiding losing any of theirs. When we talk about workers losing their jobs at factories, that is a direct result of bad decisions made by Corporate America; not because taxpayers failed them or the courts caused them harm.

Let’s face it get between Corporate America and its money and you will feel the pain and suffering that an unfeeling power can bring down upon you. When Corporate America loses, they can be ruthless; just ask some of the folks from Witchita, Kansas.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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