General Motors
What Happened
On February 6, 2014, General Motors (GM) recalled about 800,000 of its small cars due to faulty ignition switches, which could shut off the engine during driving and thereby prevent the airbags from inflating. The company continued to recall more of its cars over the next several months, resulting in nearly 30 million cars worldwide recalled and paid compensation for 124 deaths. The fault had been known to GM for at least a decade prior to the recall being declared. As part of a Deferred Prosecution Agreement, GM agreed to forfeit $900 million to the United States.
Signs Missed
Courtland Kelley sued GM in 2003, alleging that the company had dragged its feet addressing the dangers in it’s cars and trucks. Kevin went on to lose the case, but still thought that he had done the right thing. Now he saw that he’d had the opposite impact: His loss, and the way his career had stalled afterward, taught others at the company to stay quiet.
Estimated Damages:
All information in this case study is based on data that was found on public domain and official public records.