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Recalls: Points of Perspective

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On: Wed, Aug 27, 2014 at 10:04AM | By: Jon Summers

Recalls: Points of Perspective

Recently car makers have been in mainstream news media, perhaps more than at anytime since the economic downturn of 2008 when the US tax payer stepped in to bail out GM and Chrysler. Unfortunately the media attention is not about the good news of an industry now getting back on its feet again, but around parts failures, and the recalls issued as a result. As this blog shows, car makers often issue recalls, but what has stood out about the GM ignition switch recall is how one bad decision has meant that millions of cars, many almost a decade old, of different brands, assembled in different plants, and perhaps worth only a few thousand dollars today, are having expensive, time-consuming, car-maker-profit-destroying work done on them to fix a faulty component. Isn’t there a better way to manage this?

I am surprised we were surprised about the situation with the GM ignition switch. Almost since their inception, Chevrolet have sold cars on value—plenty of features/benefits with a nice low price—this is, after all, the American Way. Continually trying to offer the lowest price possible has led car companies to be ruthless with their suppliers, and there is a clear incentive for both car maker and parts supplier to cut corners if that will reduce the cost, even by a tiny fraction, since that might be the thing making you a cent per unit cheaper than the competition. The implications are obvious to anyone who uses a BMW or Mercedes for a short time, and then compares it to a GM or Ford product, especially cars five or ten years old. The gap in quality—of materials, design, and build—is as wide as the shut lines of an old Crown Victoria. Conventional barstool carguy wisdom holds that VWs are not as reliable as Toyotas, but are better quality than Ford/GM/Chrysler. Given this, it seems a little silly to emphasize cheapness above all else, and then be upset when a component developed and designed to be as cheap as possible fails; after all, isn’t it common sense that “you get what you pay for”?

It is worth examining the price differences between premium product and domestics. Comparing a 2004 BMW 325i with a 1991 Ford Econoline van, a headlight for the BMW costs $425 for the OEM product and $170 for non-OEM. Headlights for the Ford are $15 each. More than this, the Ford parts are more readily available—typically carried by your local NAPA or O’Reilly’s—while BMW parts may need to come from a dealer, a specialist, or be mail-ordered, meaning that repairs take longer to complete. Clearly, the price differences are sometimes very wide indeed and many motorists choose the low price/quality option because they cannot afford anything else.

There’s something deeper here too. Cars are not built to last forever, and, moreover, many of the components used to build them are not designed to last even the useful life of the vehicle: Ford expects owners to buy four or six headlights over the course of the Econoline’s life—the bulb, glass, and body is one disposable sealed unit, held onto the front clip with four Phillips screws. Replace, don’t repair. Many components on the van are so minimalist that they are close to being non-functional—for example: horrible vinyl seats which have no recline, headrest or forward/rear adjustment, and bite your bum after more than two hours sitting in them. The opposite of this old Ford is not the luxury of Cadillac or Mercedes, rather it is the brio, the spirit of Alfa Romeo, where at least it seems as if the designers cared what you, the user, thought.

Is extreme cheapness really the design and manufacturing ethos we consumers want?

If a driver has a blow-out and damages his car, legally the driver is liable. Perhaps a dog did run out, or the road did have glass or nails on it, but the responsibility for the damage to the car rests with the person driving—inanimate objects like glass, nails or the tire cannot be held to blame. Returning to the GM ignition case, it seems that this small, cheap part failed only if it was used in a certain way: i.e. if the driver had lots of heavy keys on their fob, the weight could cause the ignition switch to malfunction in a dangerous way. This means that there is an element of human responsibility here—if you used the key in the way GM engineers intended there was no issue. Can GM’s engineers really have been expected to engineer an ignition switch which could resist many times the weight of the key? Even after the car was a decade old, had done over 100,000 miles, hadn’t been inspected by a GM technician throughout it’s life?

It may just be that we consumers are being a little unreasonable. Certainly, our standards are much higher than they were years ago—muscle cars are regularly restored to “better than new” since the “as new” standards of the sixties are lower than modern collectors expect; four decades ago, customers were more ready to accept overspray and uneven panel fit. Cars are made up of tens of thousands of components, all of which must be assembled just right for everything to work as it should; thought of in this way, it is amazing they work as effectively as they do.

Of course, manufacturers must produce components and products which are safe, assuming they are used under reasonable parameters. If GM ignition switches were failing the moment cars left the dealership, or, indeed, if the weight of the key alone caused the issue, then the law should step in to help car buyers. Beyond this, it seems that car buyers, like everyone else, would do well to remember the adage caveat emptor: Let the buyer beware.

There is another element here, familiar to anyone who has seen the Brad Pitt movie Fight Club: car makers examine the cost of a recall, examine the likely cost of lawsuits resulting from NOT issuing the recall, and, unless the latter exceeds the former, they do nothing. Unethical, at the very least, and downright immoral if we remember that people sometimes die when components on cars fail. Hopefully car makers are less likely to go down this unethical road in the wake of the GM ignition switch debacle. Car buyers should expect manufacturers to recall cars they know to be dangerous/faulty. On balance, consumer expectations are high, but not unreasonable.

Bettino Craxi, former Prime Minister of Italy in the eighties, once said that if you waited long enough, most problems went away. Perhaps the whole recall issue will go away of its own accord: in urban areas like New York, Los Angeles, and San Francisco all sorts of alternatives to the traditional options of buying or renting cars have cropped up recently, such as ZipCar, RelayRides, and Uber. As consumers adopt these kind of mobility solutions, they stop owning/leasing their own car, and therefore need no longer engage with maintaining it. Recalls become the responsibility of whoever owns the fleet of vehicles. For those of us planning to drive our own cars, it is a sobering thought that as long as there have been cars, they have had both design and mechanical issues which needed repair/replacement, therefore the inefficiency of the recall process is likely to remain a feature of the automotive landscape well into the twenty-first century.


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