Tag: General Motors

GM Shows That Lying Can Be Worse Than The Problem

GM and compliance

General Motors had a problem with its cars and didn’t fix it. Then the company apparently tried to cover up the mistake and lied about the mistake. As a result, GM lost the story and ended up with a headline of GM Lied and People Died.

The problem seems to come from a mistake made by an engineer in designing the ignition switch design. He approved the design even though it failed to meet GM’s standard on torque requirements. The result is that the key could inadvertently move out of position, affecting power brakes, power steering and air bags.

That engineer authorized a switch redesign after problems surfaced. However, he did not assign a new part number, making it impossible to track any changes to the part. As the defect became apparent, GM compounded the engineer’s problem by failing to fix the problem.

So far 13 deaths and 32 crashes have been linked to the defect. GM has repaired more than 113,000 cars out of a total 2.6 million worldwide under the switch recall.

Because of the lies and cover-up, GM loses the ability to tell a more nuanced story about the defect.

Car and Driver tested the effects of the key defect and the results do make it sound like the car turns into a death trap. For brakes, with a full failure, the effort to stop the car increased from 51 pounds to 220 pounds. That’s a big push but achievable by most people. The magazine’s tests resulted in 3 more feet of stopping distance.  That increase is after a complete shutdown. The brakes will still have some boost after the engine shuts off.

Steering effort increases from a range of 3.3 pounds to 8.0 pounds up to 15.1 pounds to 29.2 pounds.  That increase in manageable for most people.

For years, people were driving cars without power steering and power brakes. Of course, the sudden loss of power can lead to panic and increase the risk of an accident. As it likely did in the 32 linked crashes.

The airbags deployment is also a more nuanced position. The airbags can deploy when the key is not in the “on” position. Cars are loaded with sensors that trigger the decision to deploy the airbags. A misfired airbag can be dangerous. So in many models, the airbags do not deploy when a person is out of position in the vehicle. This is particularly true when a passenger is not restrained by a seatbelt.

At least seven of the thirteen victims were not wearing their seatbelts. That increases the chances that the airbags would not deploy, even if the key was in the “On” position.

At least four of the drivers were under the influence of drugs or alcohol at the time of the accidents. That will decrease their ability to properly react to the defective shutdown after the key moves.

But GM lost the ability to control the narrative. The company manufactured a vehicle with a known defect and then failed to fixed the defect after it was discovered. The dominant narrative that the cars turned into uncontrollable deathtraps doesn’t hold up. But GM is stuck addressing its internal problems with the media and regulators.

The lies made the problem many times worse for the company.

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Incentives, Productivity and NUMMI

I recently listened to a great show from This American Life. They covered the story of New United Motor Manufacturing Inc. (NUMMI). General Motors and Toyota opened NUMMI in 1984 as a joint venture so Toyota could start building cars in the US. Toyota showed GM the secrets of its production system and how Toyota made cars of much higher quality and much lower cost than GM.

There are some great lessons in the story for compliance professionals. In part because the story can be seen through the lens of incentives and corporate culture. Two topics that are important to compliance.

For GM plant managers, their pay was based on productivity. They needed to get lots of cars out the door at the end of the assembly line. It didn’t matter whether the car could drive off the line or had to be towed. Workers told the story of cars coming off the line with a Monte Carlo having the front end of a Regal. They would just let them run down the line and out into the yard. Then they were fixed out there (with overtime). The emphasis was on quantity. At GM, the production line could never stop.

The Toyota system empowered the line workers to stop the line if there was a problem they couldn’t fix. The emphasis was to fix the problem at its source and not defer it for later. The emphasis was on quality. (Some of the recent problems at Toyota can be blamed on changing their focus to quantity. They wanted to be the biggest car company in the world.)

In spreading the Toyota system, there was resistance from both the company and the union. The union was opposed because the system was more efficient and would reduce the workers at a plant by 25%. The NUMMI plant was the re-opening of a shut down GM plant. The union was out of work and was more open to change. It was either change the way you work or don’t work at all.

GM had trouble empowering its worker and changing the corporate culture that comes along with the Toyota production line. They thought workers would just stop the line to play cards and get coffee.

Its worth an hour of your time to listen to the story.

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