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General Motors’ Ignition Failure Hearing Essay

1006 words - 5 pages

On April 1st, 2014 in Washington D.C., General Motors (GM) Chief Executive Officer Mary Barra testified in front of a panel of senators regarding the company’s late delay in addressing a defect in ignition switches, causing cars to lose power and injuring or killing the drivers. While GM has issued a recall on cars that are known to have this defective product, the problem lies in the delay of action on the part of GM, who are accused of knowing about the defect as early as 2001.
One of the many problems during the hearing is the emergence GM not only knowing about the defective ignition switch, but they also switched the defective product for a working one, yet still kept the same product ...view middle of the document...

Barra also claimed that despite her status in the company throughout the years, no mention of a defective product was mentioned to her until she became CEO, to which she responded by citing her response to the information by finally recalling the cars that contained the defective ignition switch.
However, multiple Senators brought up arguments that Barra kept producing the same argument for. Senator Heller’s main argument was that since GM was bailed out with money paid for by taxpayers, GM had a responsibility to disclose the information regarding the defective product to the public. Senator Murphy argues that because GM and the National Highway Traffic Safety Administration (NHTSA) failed to open an investigation regarding airbags not inflating during a crash, which could result from a loss of power as experienced by the faulty ignition in GM cars, families suffered unnecessary tragedies, to which Senator Klobucher asks if they will be properly compensated. Senator McCaskill also questions why GM used the same product number for two different products, citing how much trouble it could cause for the company and other businesses that deal with the same parts as GM, which could potentially worsen the situation. Barra responds to a majority of arguments by stating that they need to confer with Mr. Feinberg regarding what path of action they should take before making any decisions regarding compensation and other appropriate courses of action in regards to the defect product.
One of the main problems in the entire situation is figuring out why GM did not report the defective product when they first detected it in 2001. Under the social entity model, and as mentioned by Senator Heller, GM has a responsibility to correct the problem due to its potential safety hazard affecting any of their customers as well as use of taxpayer money to bail the company out later on in 2009. The failure to initiate an...

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