Defective Products Recalls With GM & Toyota: Are You Safe?

Over the past few days, a lot of people have asked me about “What’s going on with all these automotive safety recalls?” There’s been a lot of media buzz about this subject, so let me give you a quick explainer.

Both GM and Toyota have been the subject of government and consumer organization investigations into deaths and injuries caused by defects in its motor vehicles. The defects in GM’s motor vehicles surround ignition switches, and with Toyota the defect involved driver’s side floor mats that caused a sudden acceleration in the vehicles. These types of product safety defects are legally known as defective product cases or product liability litigation. The deaths and injuries that were caused by these defects have occurred in several states. What makes this such a big deal, you might ask? Do manufacturing mistakes not happen, innocently? No large manufacturing organization is perfect, is it? Yes, innocent mistakes do happen, to everyone. And true, no corporation is perfect. But it’s not those points that are making the news with GM and Toyota.

No, it’s the same-old, same-old: Big business trying to cover up its mistakes, while unknowing consumers who buy the products that the company knows are defective, become injured or worse. You see, it’s become apparent, so far at least, that both GM and Toyota separately knew about the respective defects in certain of its cars, yet said and did nothing. Why? Why did Ford say nothing in the 1970’s when it knew that its now-famous Pinto model was a rolling time-bomb, with a defectively designed and shockingly unsafe gas tank? Why did the tobacco companies say nothing when they knew they were manufacturing a dangerously unsafe product with their addictive cigarettes? While many words can answer this question, one word strikes to the heart of it: Profit. These huge corporations quietly conduct their own cost-benefit analyses, and they determine that if they go public and release information about the defect, they will suffer more revenue losses in decreased sales, than they will if they’re sued here and there. So they say and do nothing.

Think I’m being perhaps a little too cynical here? You’d be wrong about that. As a Boston, Mass., defective products lawyer, I have seen so many cases of shockingly immoral corporate behavior when it comes to defective products cases and Massachusetts product liability cases, that it would stun most people. They say a leopard never changes its spots. When it comes to corporate misconduct, that expression could not be more apt.

Perhaps some minor, and very initial, credit should be given here to GM’s new chief executive, Mary Barra. She has placed herself at the front of GM’s efforts to take responsibility for mishandling the defective ignition switches. A day after assuring her employees that GM is revising internal procedures to correct safety issues more rapidly, she appointed a director of global safety, Jeff Boyer, who is a longtime company engineer. Barra met with reporters this past week for the first time since last month’s recall, which is speedier than past automotive company presidents have done. But notably, she did not affirmatively say that GM would compensate the families of victims killed in crashes caused by its vehicles’ defective ignition switches. ”I am very sorry for the loss of life that occurred, and we will take every step to make sure this never happens again,” she said. That’s a good start, but I suspect that this initial, out-front response may be a spin control effort to stem any threat to GM’s reputation and sales figures.

As for Toyota, this story is even worse: Following an extensive criminal investigation by the U.S. Justice Department, Toyota has agreed – finally – to pay $1.2 billion (yes, that’s a “b,”) to settle that investigation, which surrounded deaths caused by the sudden acceleration of its vehicles. Don’t giver Toyota too much credit: It didn’t do so quickly, and it didn’t do so freely. Making the announcement earlier this week, U.S. Attorney General Eric Holder revealed that the penalty was the largest in its category levied against an automobile company. The four-year criminal investigation resulted in Toyota admitting to misleading consumers and government regulators by assuring them that it had safely corrected the acceleration problem arising from its defectively designed product – its floor mats. When it made these safety “assurances,” Toyota knew that it had not recalled other vehicle models vulnerable to the very same problem. Toyota also deliberately concealed from government regulators a separate acceleration danger related to a faulty pedal. To quote Attorney General Holder, ”In other words, Toyota confronted a public safety emergency as it if were a simple public relations problem.”

As I said, a leopard never changes its spots. Especially the very large corporate leopard.

P.S.: Update, Mar. 25 2014: If anyone wants to know the devastating, life-changing impact that kind of corporate deception (legally speaking, “nondisclosure,”) can have on a person or family, see this story on GM’s actions in The New York Times. Makes the point, doesn’t it?

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