Professor Elam

Wednesday April 2 2014

GM had lots of problems with the first 2005 Cobalt.

GM's new CEO notes that GM was a climate of cost control at all costs, now a climate of consumer focus.

This story is a lot like the Ford Pinto that caught on fire. Ford concluded it was cheaper to pay death claims than fix the mis placed fuel tank. Here GM concludes the same about a 90 cent part for an ignition switch. Worse, when GM did get a replacement part it used the same part number. Dealers could not tell the difference.

This is a good subject for an ethics discussion in our classes. Why could GM not distinguish between consumer safety and cost?  What did that say about teh tone at the top? NOw the new female CEO has to make excuses or stew silently in front of a Congressional Committee eager of course for a photo op or sound bite at her expense.