Academic journal article Journal of Case Studies

General Motors: The Ignition Switch from Hell

Academic journal article Journal of Case Studies

General Motors: The Ignition Switch from Hell

Article excerpt

Background

Since incorporation in 1908, General Motors Corporation (GM) had developed iconic cars on US highways including the Cadillac, Corvette, El Camino, Malibu, and Camaro. Over the years, GM along with the automobile industry had overcome major financial, engineering, and ethical challenges. There were widely documented studies on the Ford Pinto fuel tank (Danley, 2005), Toyota accelerator recall (Meisenbach & Feldner, 2012), GM's ignition-switch problem, and Volkswagen's emission scandal (Elson, Ferrere & Goossen, 2015). The GM ignition switch case was unique because it unraveled over a period of almost ten years. On September 16, 2015, the Wall Street Journal reported that General Motors (GM) and US federal prosecutors had reached a criminal settlement in a case involving GM's handling of an ignition-switch defect that had led to the recall of millions of vehicles and was linked to more than 100 deaths. According to the settlement, GM would forfeit $900 million to the federal government and admit to charges of wire fraud and concealing information from the National Highway Traffic Safety Administration (NHTSA) as well as the public regarding safety defects in ignition switches that had been designed and manufactured with too-low torque. Did a decision by one engineer to introduce a faulty ignition switch culminate in dozens of deaths and injuries? While GM had accepted legal responsibility for the ignition-switch problem and made a commitment to take remedial action, there would be continued fallout within GM and among contractors, the automotive industry, the National Highway Traffic Safety Administration (NHTSA), the stock market, and other entities that had a stake in the industry.

Developing the Ignition Switch

The ignition-switch problem appears to have been set in motion in 2002 when GM engineer Ray DeGiorgio approved the manufacture of a new ignition switch by GM contractor, Delphi Mechatronics. The switch had been developed for the Delta Kappa platform vehicles. Before the ignition switch went into production, other engineers at GM involved in the development process appeared to have knowledge that the switch did not meet required specifications. DeGiorgio approved installation of the ignition switch in the Saturn Ion, Chevrolet Cobalt, Chevrolet HHR, and Pontiac G5. The ignition switch was also installed in certain models of the Saturn Sky and Pontiac Solstice (Valukas, 2014). The Valukas Report, prepared by Anton R. Valukas and Jenner & Block LLP, was commissioned by GM's new CEO Mary Barra and its board to investigate and identify the root cause that led to installing the faulty ignition switch.

The Ignition Switch from Hell

By 2004, GM engineers had reviewed reports of the ignition-switch failure in which the engine could be shut off while driving. However, they determined that it was not a safety issue; the problem was attributed to various competing hypotheses, all non-safety related. At this point, it was a low priority customer inconvenience. The shut off would cause the airbags not to deploy as well as the loss of power brakes and power steering. The engineers had not realized the implications of the airbags not working when the engine was switched off (Valukas, 2014). DeGiorgio had labeled it as the 'switch from hell' (Valukas, 2014, p. 48). This approach to prioritization would affect how other decisions were made and resources allocated. Following increased customer complaints, the NHTSA started investigations on engine stalls and recalls.

On May 7, 2004, the NHTSA visited GM's Milford Proving Grounds where GM gave a presentation regarding the stalling of their vehicles. The objective was to demonstrate that drivers could still control the vehicle after a failure. Airbag deployment was not discussed in this meeting. In a June 3 meeting regarding engine stalls, the NHTSA advised GM that in a case where the number of failures was inordinately high, the factors should be considered but did not necessarily immunize a manufacturer from conducting a safety recall (Valukas, 2014, p. …

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