| Pub. Date | : October, 2021 |
|---|---|
| Product Name | : The IUP Journal of Organizational Behavior |
| Product Type | : Article |
| Product Code | : IJOB361021 |
| Author Name | : Sireesha Mamidenna* and Balaswamy Pasala** |
| Availability | : YES |
| Subject/Domain | : Arts & Humanities |
| Download Format | : PDF Format |
| No. of Pages | : 12 |
The case study describes how faulty ignition switches in some car models of General Motors (GM) led to one of the biggest recalls in the history of the US automobile industry. The recall happened almost 10 years after customers first complained about safety issues related to the ignition switch that automatically turned the car's engine off while the vehicle was in motion and caused non-deployment of airbags during crashes. The defect was linked to 124 deaths and 275 injuries and GM paid about $2.6 bn in penalties and settlements, including the fine. The case looks into the various reasons identified for this fiasco when Mary Barra, soon after becoming the CEO of GM in 2014, appointed a law firm Jenner & Block LLP and former US Attorney Anton Valukas to conduct a thorough investigation into the circumstances that led to the recall. One of the primary observations of the Valukas Report was the absence of a culture of safety at GM. The report also cited issues related to working in silos that impacted cross-functional communication and technical operations. GM undertook a number of measures to bring about a change in its safety culture.
We are not going to be satisfied with just solving our current problems. We
are going to be industry leaders.1
- Mary Barra, CEO, GM, in July 2014
Openness and accountability are two things that are very different at GM now.
Everyone is encouraged to speak up on safety issues. They'll be followed up
on and we'll take action.2
- Maryann Combs, Vice President of Global Vehicle Safety, GM, in
September 2019
We reinforce safety on a monthly basis, but once a year we dedicate a week
to product safety and workplace safety and making sure people know why it's
so important. That kind of commitment over many years ... needs to continue.3
- Mary Barra, CEO, GM, in June 2020
In September 2018, a federal judge in New York dismissed criminal charges against General Motors Company (GM) in connection with faulty ignition switches in some of its vehicles that had led to one of the deadliest vehicle defects and biggest recalls in the US automobile industry's history. The issue began over a decade ago after customers first complained about safety issues related to the ignition switch in the Chevrolet Cobalt (Cobalt), a compact car launched by Chevrolet (a division of GM), in 2004. GM had paid a total of $900 mn in fines to settle a US Department of Justice criminal case. The company also paid about $2.6 bn in penalties and settlements, including the fine,4 and agreed to Federal monitoring by an independent monitor appointed under the 'Deferred Prosecution Agreement' that the company entered into as part of the US Department of Justice investigation of the ignition switch recall.5