Cutting Corners to Make a Profit

GM Bondholders

In recent years, I have noticed that every couple months I’ll hear on the news another recall of some big brand name car. Recently, General Motors has been under fire for their Chevrolet Cobalt which was suffering from numerous faults including unexpected stalling, unresponsive airbags, and loss of power-assisted brakes. This makes me wonder, how was GM not aware of these life-endangering flaws? Turns out, the company was fully aware of their defective cars. In fact, they have known the root cause of these problems for a decade now. Which begs the question, why are cars being recalled almost 10 years later? GM’s reason for their lack of initiative to fix these problems during production was simple. They did it to save money. However, the money they saved was not worth the lives of 13 people who died due to GM’s ignorance. In my opinion, I felt that General Motors thought if they kept pushing back the agenda of fixing their faulty cars the problems would eventually disappear. I don’t think they had anticipated for lives to be lost due to their unethical way of thinking nor were they prepared for the financial backlash as a result of their poorly made decisions. In the end, their plan on cutting corners to save some money ended up costing them over 2.5 billion dollars just on recalling their cars. It is alarming to know that companies are willing to sell their unreliable products to consumers while withholding crucial information just to make a profit.

 

 

sources:

http://money.cnn.com/infographic/pf/autos/gm-recall-timeline/

http://www.businessinsider.com/us-auto-regulator-may-have-ignored-deadly-problems-in-recalled-gm-cars-expert-says-2014-3

http://www.autonews.com/article/20140705/OEM11/307079958/just-how-much-will-recall-storm-cost-gm

 

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