Faulty Ignition Switch Prompts GM to Recall 778,000 Cars

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GM has issued a recall covering more than 778,000 small cars as a result of a faulty ignition switch. The cars are the 2007 Pontiac G5, and the 2005-7 Chevrolet Cobalt. They were sold in the United States, Canada, and Mexico. To date there have been six fatalities in crashes where airbags failed to deploy.

It has been determined that the switches, which were made in Mexico, may not meet company torque standards. As a result, under certain circumstances, where there is any kind of jarring force on the switch, it can rotate from the “run” position to the “off” position. When this happens power is lost to the vehicle and all power operated devices, such as airbags.

In the short term GM is advising all owners to remove “non-essential” items from their key rings, as the extra weight could intensify the problem. No date has been given for the commencement of the recall, but once it begins dealers will replace the ignition switches at no cost to the owners.

The GM ignition switch recall affects 619,122 cars on the road in the States, 153,310 in Canada, and 6,130 in Mexico. Both models, the Cobalt and G5, have been discontinued. Owners can call Chevrolet at 1-800-222-1020 or Pontiac at 1-800-762-2737 to verify if their vehicles are covered by the recall.

Following a hot year of sales, the recall could have damaging effects to public perception of the brand. In an article yesterday (Toyota Prius Recall Reflects Changing Attitude) that covered the Toyota recall of 1.9 million vehicles, the discussion of a changing attitude in the industry toward recalls was highlighted. In Toyota’s case, the 1.9 million vehicles were being recalled before any reports were made of failure, in what many see as a preemptive strike. How GM decides to handle this recall, covering vehicles that have claimed six lives, could have serious implications.

In an earlier incident covering the same vehicles, consumers complained over sudden power steering loss, GM decided not to recall the vehicles. It later reversed that decision as the National Highway Traffic Safety Administration (NHTSA) launched an investigation.

In this latest case, General Motors was never investigated by the NHTSA concerning the ignition switch. The company itself learned of the issue through its own field reports and decided to launch the recall.

Now that GM has issued it, how the company handles the process will be telling. In Toyota’s Prius case, Toyota stock had hardly moved at the end of the day the news broke, which signaled that confidence was there regarding Toyota’s commitment to fixing the problem. If GM follows suit in an expeditious manner, then they too should weather the storm. If they drag their heals then perception may shift.

Brand management is key today, and a positive perception is far preferred to a negative one. Any company seen trying to fix a problem of its own volition will give assurance to the consumer. That assurance potentially translates to more units sold.

Even though the faulty ignition switch has prompted GM to recall 778,000 cars, it could prove a valuable lesson in public relations for the company that strives to recover its lost crown as being the number one car company in the world.

Editorial by Scott Wilson

Sources:

New York Times
Detroit News
Reuters
Guardian Liberty Voice

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