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Is My Life Worth a Buck?

Is my life worth a buck? That’s what many owners of the Cobalt and other General Motors products must be asking themselves now. Surely, that’s the last question GM wants its customers to raise as they decide which vehicle will be their next purchase.

This week, a several year old memorandum surfaced in Congressional hearings investigating safety issues tied to the Cobalt’s ignition system. Written by an engineering professional at General Motors, it indicated that changing a defective ignition part would add  $.90 to the cost of each car. The information available thus far suggests that GM concluded that such an
expense could not be initially justified.  Ultimately, someone authorized manufacture of a new part.  Sadly, at least 13 deaths have been linked to the defect found in the original component.

Testifying before Congress, GM’s new president, Mary Barra, expressed her regret over the Cobalt’s safety issues; she stated that GM is now moving from a culture of cost containment to a culture of safety. Ms. Barra testified that communication silos will be removed and senior management will learn of safety concerns faster. Those are welcome commitments. Nevertheless, some people will never consider buying General Motors products. Other loyal customers will likely check out and purchase other brands.

It’s been nearly 30 years since Ford dealt with a similar business crisis.  For many of us, when we hear the word, Pinto, we picture the ill-fated Ford compact whose exploding fuel tanks caused grotesque deaths and injuries. Likewise, my guess is that for a long time, when we hear Cobalt, many of us will think of GM’s substandard subcompact rather than the bold, vibrant blue color for which the company named it.

How could this have been prevented? From what Ms. Barra stated, it appears that GM looked at costs primarily from the perspective of direct out-of-pocket expenditures. For organizations committed to quality and safety — which spans many industries, including nuclear power, healthcare, and pharmaceuticals — this is a myopic, dangerous business view. But cost control as a primary business driver makes sense as long as the full range of critical metrics is considered.  The true cost of product defects, safety hazards, and aberrant workplace cultures is the resulting damage caused to brand reputation and trust when the public or an organization’s own team members suffer injury.

So where should GM start? I recommend it to return to its deeply stated values and commitments. These are the first phrases in GM’s statement of corporate responsibility based on its current web posting:

General Motors is a great car and truck manufacturer with a long history of outstanding corporate citizenship. At GM, corporate responsibility is more than words. It is an acknowledgement that our actions shape our reputation”

Putting its values into daily action from workaday to major issues will encourage everyone throughout the organization to raise concerns and issues promptly and clearly. That will then give GM the quick information it needs to address problems before they cause widespread harm. In turn, prompt preventive and remedial actions will bring meaning back to its values and will help restore public trust, which has been damaged in such a tragic, costly way.

1 Comment
  • Joana_JW says:

    Business crisis are terrible; they have the potential of uncertain landing that can be tragic. I wish strength for all! Culture either makes or mars completely, especially in an organization! Thanks for sharing this brilliant insight, this is quite a revelation for me 🙂

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