When this posts… I will be in Maine… hopefully, sipping on a freshly made iced tea with a slice of lime… checking out mooses and other wildlife roaming free and easy.
I wrote this last Friday… it’s in place of my usual WTF piece… I’ll be back next week and will return to my usual format. But… I hope this serves ya’ll well, while, I chill with my good friend, Frank… in Maine…
See ya’ll, when, I see ya’ll.
A problem, which has been tied to 13 folks now being dead.
A problem, about which GM did nothing until this February, when, they started the recall of 2.6 million GM cars that had the ignition trouble.
So what is the problem? The problem with the faulty ignition switch is it caused some cars to shut off while driving… and… that could certainly be disconcerting when traveling down a road…especially a highway… but… that was not the limit of the troubles.
When the switch turned the car off, it also included issues with airbags being disabled… very problematic when airbags are supposed to stop stuff like your face getting smashed into a windshield when your body is propelled forward during a sudden stop.
Or, failing anti-lock brakes and power steering… antilock brakes failing is not fun… I’ve had it happen and it is downright frightening…and… no power steering? If it happens at a high rate of speed it could be a very big problem. For someone like me… a somewhat strong guy… not a supremely fit athlete but I ain’t no 90 pound weakling either… but today’s cars are nigh unto being unmanageable for someone like me without power steering. For someone not so strong; it would be very, very problematic. For someone like my mom… 100 pounds, if she be lucky, when she steps soaking wet out of the shower… uncontrollable.
Did I say the faulty ignition switch has been tied to at least 13 deaths?
At this time, the company still faces lawsuits and the cost of a lot of repairs. It most likely won’t be cheap but I’m guessing it won’t break the company either.
And, one last thing… no criminal charges have been applied to any one involved in the case… despite the 13 deaths. Not one person has been held up to any scrutiny that he, or she, could have stopped 13 folks from being dead if they just did the right thing and said… “America, we got a problem and we need to get it fixed right now.”
No one did that. And, that, to me is a crime and someone should be held accountable.
Corporations don’t act independent of people making decisions. Someone screwed up… someone should pay for screwing up. Just like you, or me, would pay if we screwed up.
The settlement also calls for GM to make internal changes that regulators say will help it do a better job of detecting safety problems with its cars. Kinda like closing the barn door after the horses and cows have already run out… huh? But I guess stuff gotta start somewhere.
The $35 million is the maximum amount that National Highway Traffic Safety Administration (NHTSA) can fine GM for a single violation. Earlier this year, Toyota Motor agreed to pay a $1.2 billion fine to settle criminal charges over its conduct during its massive unintended acceleration recall four years ago. But that settlement was with the Justice Department, not NHTSA. The safety regulator was able to impose fines of $48.8 million on the Japanese automaker… the reason? It fined Toyota for multiple violations.
Now, here’s the kicker regarding that $35 million fine… it represents less than 1% of GM’s earnings over the last 12 months.
In other words that fine… the 35 mil… is just another cost of doing business for GM.
Yeah… so far this year, GM has recalled nearly 13 million vehicles and it has already taken a $1.3 billion charge to deal with the cost of repairing the faulty ignition switches and other recalls it announced in the first quarter. And, that kinda, sorta wiped out the company’s profits for the first three months of the year but there is another three quarters to go in the year and lots more earnings and profits to be made.
But wait… on Thursday GM announced it was recalling another 3 million vehicles worldwide, and that it would take a $200 million charge for those repairs. But, what’s another 200 mil? Just another slight bump in the earnings and profit highway.
But wait… all these charges that GM is taking… they don’t include any fines or penalties it will have to pay federal agencies, or payments it might have to make to crash victims and their families. That’s gotta cost a pretty penny… right?
They have a cadre of lawyers that will eventually settle all of that stuff… the cost will most likely be high… maybe even extraordinary… but… even if it absorbs the earnings and profits for the rest of 2014 it still won’t stop the corporate behemoth from keeping on, keeping on. Simply because… it won’t be resolved in 2014… it will drag on and on and on and on and on… maybe 5… 10… years down the road some snippet will appear in the Wall Street Journal that GM has finally made a cash settlement with the last of its litigants in an incident that happened a long time now gone.
Simply know this, it will be years before GM settles and a cash reserve fund will be set up to balance the books when push comes to shove and the tab comes due… if, it has not already been set up.
Marry Ruddy’s daughter, Kelly, 21, died in January 2010 when the Chevrolet Cobalt she was driving crashed. Ruddy has long believed the vehicle was defective. She says…”I don’t think (GM) deserve the privilege of the trust of the American people…It’s beyond deception. It’s sinister.”
But, it’s just the cost of doing business… bad business at that. The cost of doing bad business but with no accountability by the people who run the business. Essentially, nothing will really change because as long as no one has to really pay then who cares… and, by pay, I mean with someone doing time in the pokey… significant time. Otherwise, it is just another red mark in the ledger book. That will eventually be erased by another black mark somewhere down the line.
Peeps start being held personally accountable and threatened with jail… stuff just might happen. Significant stuff.
But otherwise… it’s just the cost of doing business.
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