GM's Heart Failure

We’re learning more details about GM’s delays in reporting significant, deadly issues with some cars’ ignition systems.

What we know at this point is that GM’s internal documents indicate that in 2001 the company knew that, in some small car models, the ignition key could move unexpectedly from “run” into “accessory.” This key movement turned off the engine, shutting down power assist systems for steering and braking – and usually disabled the car’s airbags.

The loss of steering, braking, and airbag deployment while a car is operating is deadly. GM attributes 13 deaths and 46 injury or fatal accidents in North America to this ignition problem.

GM’s internal documents note repeated incidents of this ignition switch defect in 2003 and 2004. Yet GM continued to use the suspect ignition in small car models into 2007. GM didn’t issue a recall until February of this year.

Worse, a 2008 internal GM presentation coached employees on what words to use – and not use – in emails and documents to GM peers due to the potential liability of terminology. Judgement words and phrases such as “deathtrap,” “apocalyptic,” “This is a lawsuit waiting to happen,” and “unbelievable engineering screw-up” were described as “examples of comments that do not help identify and solve problems.”

More GM small car models were recently included in recalls, totaling 2.7 million cars worldwide. Estimated costs of replacing those faulty ignition switches is $200 Million.

US law require automobile companies to report safety issues they discover. GM said last week it would pay the $35 Million fine levied for delays in recalling affected models.

GM is not alone in delaying recalls. Numerous automobile recalls have occurred over the past 40 years and, too often, those recalls come years after the makers learned of these safety issues.

I’m not concerned that companies make mistakes. I’m not concerned that, as vehicles age, for example, components may not be able to maintain the safe performance they were designed to do. That’s natural in our fast-paced global business world.

I am concerned about how companies respond to the issues discovered. Company responses say a great deal about the organization’s purpose, values and beliefs.

When recalls happen promptly (as is the case recently with Nissan, Mazda, and Ford), I rest assured that these companies are concerned about consumer safety.

Recall delays are failures of internal systems, failures of engineering, but most critically, failures of the heart.

If a company doesn’t value people – employees, customers, consumers, etc. – it will be obvious in the plans, decisions, and actions they make. If a company does value people, that, too, will be obvious.

GM’s demonstrated plans, decisions, and actions regarding this deadly ignition switch defect lead me to believe that theirs is a culture that values profits, not people.

What do you think? How do you view these delays in safety recalls? How does a company’s purpose, values, and beliefs impact your perceptions of that company? Add your comments, insights, or questions below.

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