Position statement4
Misrepresentation of facts.4
Negligence.5
Corporate Decision-making...6
Summary
General Motors Company deals with automotive, in most cases, vehicles. The management was aware of the problems with the ignition switch which could force cars to shut suddenly down, disabling their steering. In practice, this could bring about an action on strict liability against the company by the consumers. According to the law, the producer incurs strict liability whenever there arise safety ramifications which the producer is aware of. In this case, it is apparent that General Motors is aware of the defects and the harm they could cause to the consumers of the merchandise. However, instead of addressing these issues, the company goes ahead to ignore the problems. This could also result in the airbags being disabled at crashes and causing malfunction in the features of safety. Although this defect was known by the management of the company, nothing was done to address it over the years. This is according to the available articles on the legal and non-legal issues that arise in the case. Because of the sensitivity of the issue, the American Congress initiated investigations to this scandal because General Motors had taken over a decade without recalling millions of cars that had the faulty ignition switches. This had resulted in a number of killings and deaths of innocent drivers who understood nothing about this issue. What shocked most people was the fact that although this problem was a real hazard in the community, it was classified as an issue dealing with customer convenience as opposed to a serious failure in the safety measures. To add up to this, Delphi Automobile PLC had verified that repairing the faulty ignition switch will cost between $2 and $5. The process would also take very few minutes. When General Motors ignored to take any action, they were fined a sum of $35 million, which was the maximum that could be fined. Not all cars had been recalled initially. Those that had been recalled include Saturn Ions, Chevrolet Combats, Pontiac G5 Models, and Pontiac Solstices among some few others. General Motors had stated that in order to avoid possible accidents originating from the ignition switches that were faulty, the consumers would be advised not to attach anything to the key. It is ridiculous that is was one of the prevention mechanisms General Motors employed to protect the customers from potential accidents arising from the ignition key. Information disparity between manufacturers and consumers should be limited to ensure that consumers have a clue on what they are dealing in before they can make major decisions. Flaws that may result from the process of manufacturing fall under two categories: fabrications and material defects. In the case of this company, it is apparent that it is fabrication defects which subjects innocent lives to problems.
According to General Motors, this problem was first realized in the year 2001. This means that the company is already aware of the problems that arise from their manufacturing process which put consumers at risk. Although this was the case, the company chose not to do anything about it. In the year 201, the company’s report showed that it had encountered an ignition problem with Saturn Ion before the car was produced for sale. The company’s 2003 report stated that its service technician observed the problem while driving. This ignition problem did not come to an end immediately. In the year 2004, the company was faced with a similar problem on its Chevy Cobalt before it was introduced into the market.
In the year 2005, the company resorted to redesign the key-head in order to solve the ignition switch problem. The essence of this was to ensure that the key would not move up and down, preventing the car’s electric system from any loss. Despite this, no recall was made. The next few years that followed saw the company intensify its investigations on the crashes though putting their focus on the failure of the mechanical airbags.
In the year 2012, GM realized that the cars it had been manufacturing had ignition switches that were different from those of the cars produced in 2010. The effect of this is to show that even if the company realized the problem of the ignition switch, it did not take major steps to avert the impending crisis. This was in contradiction of the federal regulations which required the manufacturer to report to the agency within 5 days (business day) when they are aware of any safety problem to a certain product and plan on how to make a recall, failure to which one could attract a heavy fine. Despite the rules being clear on what should be done in such events, General Motors ignored responsibility, leaving the risk of their products to the public even when they were conscious about it. On a similar note, several producers have the tendency of disregarding the safety of the user. In this case, General Motors would perfectly fit.
This crisis involved several parties. Another possible action General Motors may face is a lawsuit on consumer class action. In this lawsuit, attorney Adam Levitt represented the owners of the cars of General Motors which had ignition switches that were faulty. Going by this case, the important aspect of consideration is that every car that left the factory already had a defect that was inherent. The argument behind this was that consumers would not have bought the cars had they been alerted of the defects. Consequently, they would have bought the cars at a price lower than the one they bought the defective cars. This was a good cause of for legal action against General Motors for dealing in defective goods.
The crisis in the company caused by the faulty ignition keys prompted various reactions from both within and outside the company. In the company, he CEO dismissed employees who were middle level and disciplined some of them. This move was geared towards the CEO showing her responsibility and level of concern for the events that had transpired. Although this move was aimed at softening the outcry General Motors was facing, the reality of the matter was that this could not be forgotten. Employees within the company did not carry the largest responsibility for the defects in the ignition key. One witness within the company gave an explanation that the pointing is done to others to claim that responsibility belongs to someone else. This is the best explanation of the misguided culture in the company where no person is willing to take responsibility. According to one of the company's employees, the company has a culture of denying problems that are related to safety. These sentiments were also shared by Dr. Carl E. Nash, meaning this was the common practice in General Motors. Effectively, such information shows that the company has a long history where delay, cover-ups, and denial were the norm. There is need to change this so that someone can take responsibility when they sleep on their jobs.
Various experts came up with different versions about this case. Ralph Nader (a consumer advocate), for instance, argued to the effect that the case had the necessary elements which comprise of criminal cover up and criminal negligence. As a matter of fact, General Motors had knowledge about the defects that were deadly which had the potential to cause death to the innocent consumers. However, the CEO decides not to take any action even after receiving such reports on the injuries and deaths that had been caused. The right move would have been to report to the authority, yet they decided to ignore the defects which were dangerous.
The National Highway Transportation Safety Administration was also involved. Accordingly, this administration failed to perform its responsibilities and duties because it failed to investigate the vehicles for any defect that had been reported twice in General Motors. Due to the company’s bureaucracy, the CEO only learned a bit late after the original incidents had occurred. Nader specifically stated that the line was not clear of the responsibility that the CEO had. With this expose, the flaws in taking responsibility and being accountable in an organization came up for a thorough discussion. Accordingly, Nader pursues the case that can reinstate all the liability suits that were facilitated by the General Motors cars. According to him, General Motors will not be subjected to or take any liability that is criminal in nature. Only Title 18 can bring a criminal penalty. Effectively, Title 18 is to the effect that if one lies to the government or fails to report the required information to the government.
According to the law, Automakers such as General Motors have a legal duty to make cars for consumption that are safe for use. Consumers have remedies to personal injury lawsuits which can be against the automakers. Respective damages may cater for suffering and any physical impairment, mental anguish, hospital and incidental expenses, punitive damages and in some cases, loss of earnings.
The position General Motors found itself in is similar to that Toyota was in. In both cases, the companies employed different tactics in an attempt to divert attention to a different aspect from the main problem. By diverting the attention, the companies would make it look like the problem arose from a minor defect instead of the major breakdown already reported. Instead of Toyota giving the correct information that the problem was related to defective accelerators, they claimed the problem was with the floor mats. This was an attempt to make the problem look small. General Motors, similarly, shifted the argument by claiming the problem was with the airbags, rather than the ignition key. This amounts to misrepresentation of facts which is in itself punishable by law. From such misrepresentation, consumers were allured to buy the goods despite the fact that they had major defects which could put a risk the lives of the users.
Position Statement
Taking the above issues into account, there are several legal implications that are breached. First, there is a breach of the implied warranty of merchantability. There are also issues to do with strict product liability. Negligence and misrepresentation are also witnessed. These give the consumers a better hand in coming up with strong cases against the company
Breach of Implied Warranty of merchantability
Business/Commercial law dictates that in commercial transactions, the seller must communicate all the relevant information available to the consumers. Before buying a commodity, consumers are required to take reasonable care to try and understand whether the item is in a good condition before buying it or not. In most cases, this can only happen where clients have a good knowledge of the products they are buying. The law dictates that the buyer can ask for any information from the manufacturer to ascertain the authenticity of the commodity I question. A caveat is always inserted in the clauses, requiring the consumers to be extra careful before making such purchases. This way, it is possible to know whether there are defects or not. In protecting the clients who do not have enough information about a product, however, the doctrine of merchantability can be enforced. Under this doctrine, the manufacturer is required to communicate any defect that the consumer is unable to discover whenever examining the product to buy it. This principle is based on the notion that sellers should not take advantage of the ignorance of the buyers to con them. Going by the above principle, it is evident that General Motors Company failed to disclose this information to the clients. There is no doubt that the information would have swayed their decisions before deciding to buy the car which ended up having defects. As such, General Motors are liable for failing to protect their clients under the merchantability principle.
Misrepresentation of facts
In law, a misrepresentation of fact is actionable. Misrepresentation entails giving a party wrong information with an attempt of enticing them to buy a certain product which they could not have bought were the right information communicated. Unlike the merchantability principle, misrepresentation involves here the seller gives the buyer wrong information, and the buyer depends on that information to buy the goods/services. Buyers/consumers always have a remedy in a court of law provided they can prove that there was a misrepresentation of facts. In the case scenario, it is clear that General Motors engages in misrepresentation of facts in order to increase its sales. Despite perfectly understanding that the problem was caused by a defect in the ignition key, the blame is shifted to the airbags which present smaller problems. With this, many people buy the vehicles, not understanding the danger that they face. Such consumers have a remedy against the seller provided they can prove that they depended on the information given to make decisions. In this case, it is clear that the buyers would not have bought the cars were it not that they were given wrong information.
Negligence
Consumers always have a remedy arising from negligence from the part of the seller. In law, this term is defined to mean a failure by a party to exercise the relevant care that any reasonable and prudent person would have exercised if they were put in the prevailing circumstances. In making an argument or negligence, the reasonable man test should be put into perspective. According to this test, one is deemed to have acted negligently if he failed to act in the manner that is expected depending on the conditions that were prevailing In the case of Genera motors, it is apparent that the CEO failed to take action to ensure that consumers were protected from defective goods. A company that has such a reputation should put into place adequate mechanisms to detect any defects that may arise in their products before taking them to the market. This becomes even worse when one considers the fact that the defects were disclosed a long time ago. It is very risky for the company because it failed to work on the available information to prevent further defects. Despite being aware that the defects were serious and they posed serious threats to the drivers and owners of the vehicles, the company took no step to protect the clients. Reasonably, the company should have recalled the defective products so as to ensure that further potential problems are alleviated. However, the company ignores this, hence should face legal action and consequences thereby.
Corporate Decision- making
In the case of General Motors, the CEO was very late in reacting to the news about the defects. This is ridiculous considering the fact that the lives of many people all over the world were in danger. The culture of the company is to trade in counteraccusations and shifting blame from one worker to the other. This may lead to further problems as the issues might not be solved immediately. To address this, it is important that the CEO and other top management officials take responsibility. This is the only way that such negligent behavior can be deterred in the industry.
Endnotes
