Essays on General Motors Recall Incidence Which Occurred in 2014 Case Study

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The paper 'General Motors Recall Incidence Which Occurred in 2014" is a good example of a management case study. Crisis communication is very critical in ensuring the success of an organization. This is due to the fact that poor communication during a crisis can lead to, reputation crisis harm for stakeholders and loss of revenue (Courtland, 2003). This has made public relations practitioners an integral part of crisis management in an organization. According to Sriramesh and Vercic (2003), effective crisis management requires the ability to handle threats in a sequential manner.

General Motors (GM) recall crisis which happened in 2014 is one of the largest scandals in the motor vehicle industry. The company made the headlines when they had to recall 2.6 million cars due to faulty ignition switch which led to deaths. The matter was made worse by evidence which showed that they knew about the fault for years but failed to act on it (Bennett & Lublin, 2014). The communication response determined the aftermath of the crisis. This essay analyses GM recall incidence which occurred in 2014.

It starts with a brief description of the incidence. This is followed by an analysis of how GM responded to the crisis drawing on various theories. Brief description of GM recall crisis In February 2014, GM motors issued recalls for several models of cars suspected to have a faulty ignition switch. The faulty switch was turning the engine on automatically and preventing the airbags from deploying while the car was in motion. According to Bennett and Lublin, (2014), investigations found that the issue was detected by the company back in 2001 but nothing was done.

By the end of 2013, GM asserted that a faulty ignition switch was to be blamed for 31 crashes and 13 deaths. Mary Bara became the new CEO in January 2014 and had to face the questions on how the firm handled the ignition switch problem. In February 2014, GM notified NHTSA that it had determined a defect in 619,122 cars in the US market. The company made the first official recall in February 2014 where Chevrolet Cobalt and Pontiac G5s were recalled. The first formal apology was made on March 17, 2014, where the new CEO made a video apology (Geier, 2014).

The apology involved acknowledging wrongdoing in crisis handling and a commitment to repair 3 million vehicles. A new safety officer was then appointed. The house energy and commerce committee started hearings on the GM ignition switch recall and why it took so long. In April 2014, NHTSA and GM CEO testified at the house and senate hearings on how the recall was handled. GM CEO, Barra made an apology to the families who had lost loved ones due to the defect (Bennett & Lublin, 2014).

On May 16 2014, GM was fined a record $35 million civil penalty after NHTSA found them at fault. NHTSA claimed that GM had failed to act fast in reporting the delayed switch defect. An internal inquiry which was carried out by Anton Valukas found out that the ignition problem had existed for 11 years. Geier (2014) asserts that this was seen by many as a pattern of incompetence and neglect. The information about the faulty cars did not reach GM management until 2014 when the issue became public.

The faulty ignition was associated with 87 deaths and a recall of 27 million cars (Bennett & Lublin, 2014).

References

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Bennett, J., & Lublin, J. S. (2014, June 4), GM Recall Probe to Blame Cultural Failings Auto Maker's, Investigation to Highlight Poor Communications, but Clear Top Bosses. Retrieved June 12, 2017, from The Wall Street Journal: http://www.wsj.com/articles/gm-ceo-to-discuss-ignition-switch-probe-findings- thursday-1401897900

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Geier, B. (2014, Dec 28), GM’s Mary Barra: Crisis manager of the year. Retrieved June 12, 2017, from Fortune.com: http://fortune.com/2014/12/28/gms-barra-crisis-manager/

Goel, V. (2014, March 23), G.M. Uses Social Media to Manage Customers and Its Reputation. Retrieved June 12, 2017, from The New York Times: http://www.nytimes.com/2014/03/24/business/after-huge-recall-gm-speaks-to- customers-through-social-media.html?_r=0

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