Tagged: GM

GM Recalls Spark Automaker Liability Scare

car ignitionThe massive brouhaha following the unprecedented recall by automaker General Motors of approximately 18 million vehicles for defects has automakers and suppliers scrambling to beef up on liability avoidance training.

GM has already been slapped with millions in fines by the Department of Transportation and faces criminal charges and civil litigation for problems associated with their vehicles, particularly the ignition switch debacle that has dragged parts manufacturer Delphi Automotive plc and airbag supplier Continental AG into the fray. It is alleged that they kept mum about the defective cars to the NHTSA (National Highway Traffic Safety Administration). The defective ignition switch has been linked to the deaths of 13 people. It is claimed that GM had known that the ignition switches were questionable years before but did nothing about it.

Central to the current attempt to evade liability is proper reporting of any questionable issues that may surface in day-to-day transactions. Suppliers are especially vulnerable to close scrutiny because of the ongoing investigation into the alleged collusion of a group of suppliers to fix prices of auto parts and components. Industry leaders fear that this can lead to isolationist company policies that will prevent effective collaboration.