Avoidable Liabilities: A Rant


I just read an article that suggested tech companies like Google and Apple should rethink entering the automotive market because it is a “different animal” due to the cost associated with building auto plants, building sales and service networks and the “daunting liabilities involved when human lives are at stake.” Retired Vice Chairman of General Motors actually sneers at the notion that “Silicon Valley techies” could do it smarter or better. While admittedly, I do not have much information or expertise on the cost of plants or the network issues, let me rant for a moment, if you will, on the liabilities issue. 

The liabilities referenced in the article are the record recalls in 2014 and the billions of dollars in fines that some automakers were required to pay. Specifically, last year, Toyota Motor Corp paid $1.2 billion for failing to report safety defects. General Motors was required to pay $5.3 billion dollar in fines, victim compensation and recall costs for the faulty ignition switch defect. And, of course, Volkswagen Group has set aside $7.3 billion dollars for the potential costs associated with its recent emissions scandal.

While these are whopping sums, let’s be clear: these are not the inherent costs of manufacturing automobiles or negligently making a mistake in the design or manufacture of a vehicle that causes harm.  These are the completely avoidable costs of putting profits over safety and cheating. First, let’s look at General Motors, the ignition switch defect was known to the company for a DECADE, but they did absolutely nothing even as they received reports that people were being seriously injured or killed. Ultimately, at least, 124 people lost their lives and another 275 were injured.  Pardon me, if I do not feel sorry for General Motors, and the “daunting liability” on their ledgers. In fact, I personally believe jail time would be appropriate for the decision-makers involved in the decade-long cover-up.

As for Toyota, the company was also fined for failing to report safety defects as required by law and for failing to cooperate with government investigators. And then there is Volkswagen who has admitted 11 million of its vehicles have been produced with an emission defeat device. Keep in mind: Volkswagen did not negligently manufacture a vehicle that did not comply with emissions. Instead, they purposefully installed a device to give a compliant reading when tested in order to hide the fact that the emissions were not compliant during normal use. This while at the same time promoting its low-emissions in its marketing.

If covering up defects, failing to cooperate with investigators, using devices to cheat on emissions is the animal we are dealing with then I would welcome a different animal. Those Silicon Valley techies need only care more about the safety of their customers than increased profits, do the right thing when a problem arises and not purposefully cheat on tests to do it better and smarter.

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