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First Toyota, now GM, carmakers lose consumer confidence over latest recall scandals

Recalls on automobiles are not uncommon.  Today's vehicles are equipped with numerous electrical components that tell the vehicle everything from how to steer, when to apply the breaks and even the temperature to heat the cabin.  As consumers we expect the carmakers to design safe, reliable automobiles.  We expect them to be on the watch for problems or defects.  We believe that the companies will recall the automobile as soon as a problem is detected.  Unfortunately companies may cut corners and delay a recall to save their bottomline.  If injury occurs because of a faulty automobile the injured party may have a product liability case against the manufacturer.

Toyota and GM are two carmakers that have tough questions to answer about the way the companies handled recalls.  Toyota was recenlty ordered to pay $1.2 billion dollars in a settlement with the Department of Justice over the way the company handled the recall of millions of its vehicles over unintended acceleration.  Apparently the carmaker had knowledge that its floor mats were defective and could cause unintended acceleration.  The Department of Justice was investigating whether Toyota intentionally misled federal safety investigators about their knowledge of the defect.  Toyota claims that it did not intentionally misled government officials, however, the investigation seemed to point to wrongdoing on the part of the carmaker.

The settlement comes on the heels of another recall woe, this time GM is in the hot seat.  GM is currently under investigation for the handling of the recall of its vehicles for a faulty ignition switch.  GM revealed the problem last month, however, company documents indicate that the carmaker knew of the problem way back in 2001!

In order to gain back some consumer confidence both Toyota and GM have appointed in house safety tsars.  Additionally, the presidents of both companies have taken lead of investigation and safety efforts.  Defects with automobiles must be detected and repaired as soon as possible to avoid injury or death.  Hopefully this latest settlement will open the eyes of other carmakers to put safety first.


Source:  "Lexus Settlement" The Economist, March 19, 2014

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