Analysis Of The General Motors Crisis Case Involving The Defective Ignition Switch

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The General Motors crisis case involving the defective ignition switch is a lesson for all automakers, where honesty and trying to cut corners does not work. The General Motors Company knowingly knew of a major, life threatening issue, but yet decided to be negligent and not fix the issue. Due to their actions taken by management, what could have been a somewhat easy fix; it was now turned in a costly one, which ruined brand image on a massive scale. In this case analysis of the GM ignition switch, it will review and provide details of the timeline of events, which led to the failure and improper actions taken by General Motors. It will also critique how the crisis was handled, describing what GM did well, how they failed the American…show more content…
On Jan. 15, 2014, Mary Barra becomes the new CEO of GM and the first woman to run a major automaker. Two weeks later, the new CEO becomes aware of the ignition switch defect and starts damage control. Finally, after over 10 years of finding the initial defect, GM issues a recall 2005-2007 Chevrolet Cobalt’s and 2007 Pontiac G5s. In March 2014, GM recalls 1.55 million vans, sedans and sport utility vehicles (Basu, 2014). In April 2014, General Motor hires Kenneth Feinberg, an attorney specializing in corporate payouts, as a consultant "to explore and evaluate options" in the automaker 's response to families of the victims involved in the recall (Basu, 2014). In April 2014, GM adds ignition lock cylinders to its safety recall of 2.2 million older model cars in the U.S. and in next month adds five more recalls of about 2.7 million vehicles in the U.S (Basu, 2014). On May 16, 2014, the U.S. Government announces General Motors Company will pay a record $35 million civil penalty after National Highway Traffic Safety Administration (NHTSA) determined the automaker delayed reporting the ignition switch defect (Basu, 2014). After three more years of legal battles, as of June 2017, GM has agreed to settle federal lawsuits with the people affected by the defective ignition switch, which was responsible for 124 deaths and 275 injuries due to the faulty ignition switches (Owusu, 2014). Also GM had already paid $2.5 billion in penalties and

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