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MGT240: GM’s Ignition Switch Recall

MGT240: GM’s Ignition Switch Recall M has recalled over 20 million vehicles in 2013-2014. A recent recall involved a faulty ignition switch. The recall sparked controversy for GM as details surfaced indicating GM had known about the problem for over a decade but decided against recalling the affected vehicles. On April 24, 2014, Tracy Samilton of National Public Radio (NPR) did a feature entitled “Recall Woes Push Along GM’s Cultural Reinvention.” Read and or listen to the feature at: http://www.npr.org/2014/04/24/306531838/recall-woes-push-along-gms-cultural-reinvention?sc=17&f=1001 In the opening statement, Samilton reports, “General Motors has announced a big hit to first-quarter earnings, largely due to costs for recalls. Profits dropped nearly 90 percent from last year, with the company making a razor-thin profit of $100 million . . .”  Samilton’s report indicates GM had known about the ignition switch problem, which sparked the most recent recall, for over 10 years. She cites various corporate cultural and structural issues, for GM’s refusal to rectify the situation. A separate NPR report states, “ . . . GM engineers received reports about problems like this – and held meetings about it – in 2005. Engineers decided against a fix because it would take too long and cost too much money (Glinton, 2014). As of June 2014, GM estimates it will have to pay hundreds of millions of dollars in fines. It is clear that GM can no longer operate as it did previously if it plans to stay in business and it seems like GM has gotten the message. Samilton’s feature ends with: “GM announced new structural, procedural and employee changes this week in response to the recall – all part of the new GM effort to leave the worst aspects of its old corporate self behind.” Additional information on the recall can be found on the sites below. Review the articles in preparation for completing the CLC assignment in Topic 5. http://www.usatoday.com/story/money/cars/2014/06/16/gm-recall-key-switch/10629373/ http://autos.ohio.com/gm-could-face-another-fine-for-impala-recall-1.497406 http://money.cnn.com/2014/06/16/news/companies/gm-recall-injuries/ http://www.usatoday.com/media/cinematic/video/10769929/]]>

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