GM Ignition Switch Scandal

General Motors recalled about 800,000 cars due to faulty ignition switches on February 6, 2014. The problem with the faulty part was that it could shut off the engine while driving, thus preventing the airbags from deploying and inflating. General Motors to recall more of its small cars, which resulted in almost 30 million cars worldwide recalled and them having to compensate for 124 deaths. The faulty part had been well known to GM for upwards of ten years prior to them declaring the recall. (Smith, 2014)
This major issue began in 2001 during pre-production testing of GM’s Saturn Ion. GM engineers experience problems with ignition switches on the Ion. The exact problem was with a mechanism in the car that is supposed to hold the ignition key in place. According to GM’s records, an internal report shows that the problem was resolved when the switch was redesigned and fixed. Not too long after this initial issue in 2004 a GM service technician sees a Saturn Ion stall while being driven stating that "several other keys on the key ring” was the issue. The technician then records within the same report that "the additional weight of the keys had worn out the ignition switch." (Valdes-Dapena, 2014)
Another major ethical dilemma occurred in the testing and manufacturing of another GM car, Chevrolet Cobalt. In 2004, A GM engineer bumps into the key in a Chevrolet Cobalt during testing, thus causing it to immediately lose power. In 2005 General Motors receives increasingly more reports of Chevrolet Cobalt’s engines turning off when keys are accidentally bumped or moved out of the "Run" position. It was reported that engineers came with the idea to fix the problem. The idea was to head of the key be redesigned so that the various objects that may be hanging from the key chain are less likely to move or jostle it. That proposal is initially approved by the company, but then cancelled and withdrawn. GM documents stated that, among other problems with it, the solution was too expensive to put into place. This is a clear ethical breach, knowingly deciding not to fix a major problem with the product in order to maximize profit and save money. (Valdes-Dapena, 2014)
During a meeting with several auto safety officials, employees are made aware of the fatal 2005 Cobalt crash in which airbags did not deploy. General Motors is made aware of ten deadly Cobalt accidents where the airbags failed to deploy by the end of the year. An engineer is asked to look at the types of crashed in the Cobalt in which the airbags failed, in order to see if there is anything in common between all of the accident. It was found that the ignition was not in run at the time of the accident in four out of nine cases.
On February 7, 2014 the initial recall began with 800,000 Chevrolet Cobalt and Pontiac G5 cars. Shortly after on February 24 GM adds 600,000 Pontiac Solstice, Saturn Ion, and Saturn Sky vehicles to the recall (Lienert, 2014). On March 12, the Justice Department launched an official investigation into why the recall was so delayed. GM later expanded their ignition switch recall to include almost 825,000 cars sold in the United States between the years 2008 to 2011. Mary Barra, recently established CEO of General Motors, stated that the ignition switch recall now covers about 2.6 million cars that were sold worldwide. By the end of June 2014, over 12 million more care were recalled related to the ignition switch and other various problems. Further research into the delayed ignition switch recall shows "a pattern of incompetence and neglect" throughout the company. Barra says she dismissed 15 employees and disciplined 5 more for their clear improper handling of the matter.
Overall there have been a total of 124 deaths that are directly linked to the ignition switches. There is also a confirmed total of 266 injury claims, 18 of them for major catastrophic injuries and 248 for minor injuries that required hospitalization. (Naughton, 2015)
In order to appease the affected parties, General Motors offered at least $1 million to the families of those who died as a result of a defect in GM cars. The compensation plan consider the number of dependents a victim had and their future earning potential. It will also pay people injured in crashes tied to the defect. GM said it won’t cap the compensation program, but that families that accept these funds will waive their right to sue the automaker. (Lobosco, 2014)
Overall, this dilemma has cost General Motors $900 million to settle the federal charges an additional $575 million to settle civil lawsuits. GM CEO said "I have said many times I wish I could turn back the clock. If we could we would but the only thing we can do is make sure we respond in the right way and we have done that in the case and we continue to do so in everything.” As a result, two U.S. senators have proposed legislation that would make violations of car safety standards a legitimized crime. Lobbyists for the auto industry, including GM, have fought that in the past. (Glor, 2015)

References

Glor, J. (2015, September 17). GM CEO: "I wish I could turn back the clock" . Retrieved fro, CBSNews: http://www.cbsnews.com/news/gm-ceo-i-wish-i-could-turn-back-the-clock/
Lienert, A. (2014, February 13). GM Recalls 600,000 Vehicles, Including 2005-'07 Chevrolet Cobalt, 2007 Pontiac G5. Retrieved from Edmunds: http://www.edmunds.com/car-news/gm-recalls-600000-vehicles-including-2005-07-chevrolet-cobalt-2007-pontiac-g5.html

Lobosco, K. (2014, June 2014). GM offers victims more than $1 million. Retrieved from CNN Money: http://money.cnn.com/2014/06/30/news/companies/gm-feinberg-victims/index.html

Naughton, N. (2015, July 13). GM ignition-switch death toll reaches 124 . Retrieved from Automotive News: http://www.autonews.com/article/20150713/OEM11/150719948/gm-ignition-switch-death-toll-reaches-124

Smith, A. (2014, February 14). GM recalls 778,000 cars for faulty ignition. Retrieved from CNN Money: http://money.cnn.com/2014/02/13/autos/gm-recall/

Valdes-Dapena, P. (2014, February 28). GM recall was delayed by internal miscues. Retrieved from CNN: http://money.cnn.com/2014/02/28/autos/gm-recall-timeline/