September 19, 2015
General Motors is an American success story. They started at the dawn of the 20th century, with a humble origin story; Buick began with horse drawn buggies, before starting its foray into the automobile market. For years it grew and expanded gobbling up smaller companies and incorporating them into its family. Just under one hundred years later, the state of General Motors’ empire started to deteriorate (which is directly due to a criminal lack of quality control). Then the housing bubble popped. The company was bleeding from every orifice. It decided to do the most capitalistic thing humanly possible, in the least laissez-faire way possible. It saved itself by killing the business’s struggling brands; and stacking their carcasses into a stairway to fiscal flexibility… though that required accepting government money (shudders). In 2009 GM was saved by the cheekiest bankruptcy in corporate history, and millions and millions of monies from the federal government. For those unfamiliar with the event, in the bankruptcy GM split into two companies. One became Liquidation Motors Company, and the other is the New GM people currently know and love. The first became a scapegoat for all the issues General Motors Corporation had, while the latter was an accumulation of lucrative assets. Barely four years (and close to $25 billion in profits) after accepting government money, General Motors is in hot water once again; facing a criminal indictment (that stemmed from actions taken more than a decade prior). In 2002, a supplier denounces the proposed ignition switches as an inferior product; despite this, a GM engineer who deals only in ignition switches; Ray DeGiorgio; green lights the design. The switches immediately find their way onto Saturn vehicles, later Pontiac, and eventually it finds itself across the Chevrolet lineup. Three years later, the first accident directly related to the switches is uncovered. Amber Marie was killed when the ignition switch of her Chevy Cobalt inadvertently switched out of the run position. When this happened, she lost power steering, normal brake function, and the airbags that could have saved her in the head-on collision the switch caused. In the coming years, over a 120 deaths were ‘officially’ attributed to this defective switch (one report cites 398). In 2014 just before the GM’s alleged horrible craftsmanship went viral (it was already public, but the extent was not household knowledge) GM appointed the first female CEO in the automotive industry. She was the hero that General Motors needed, she steered away from the iceberg to prevent a catastrophe. Immediately after being appointed she disclosed the scathing report from Anton R. Valukas. His report detailed all the wrongdoing on GM’s part. Her exercise in integrity helped return much of the company’s lost faith. The pessimist in me believes that this was a cold calculated move on GM’s part. Executives knew that once the public became aware of the issues; they would be looking for someone to crucify, and the public might have a harder time attacking the first female CEO who exposed all the corruption. Also since the corporate power had since changed hands they would not have to deal with the government cutting off the head of the snake. Essentially they started a pathos appeal to distract from the ethos and logos aspects of the issue. And it worked, in the grand scheme of things, GM made off with nothing more than a slap on the wrist. The criminal case was just closed, resulting in a $900 million dollar fine which might sound substantial, but is nothing to a company that had over 10 billion in cash reserves, and made more profit last year than the aforementioned fine. As part of the settlement, they will be eligible to expunge their charges from the record. Toyota paid a third on top of what GM did; for an objectively lesser recall. It is said that is due to the fact that Toyota lied to the government, whereas Barra presented all the facts on a silver platter. Again my inner cynic says, while that might have played a factor; I feel Jingoism might have played a larger role. But that is a cynical assumption on my part, this does not reflect the views of any entities other than my own. Cynicism aside, the most disillusioning aspects of the whole ordeal, are the systemic shortcomings. It is embittering knowing that it is not illegal for an automaker to sell intrinsically inadequate automobiles. The reason being is far more sinister in my opinion. When money makes the rules, lobbyists (and in turn corporations) have more political power than the American public and politicians. GM was found guilty not for knowingly putting millions of people in harm’s way, but for lying about it. General Motors Corporation killed people and new GM knew (but because there was not a paper trail it passed the bankruptcy proceedings); only the latter is criminal. Wistfully, in the organization in which it lives, that barely the tip of the sword. Avarice, empty promises, and parsimony; permit profits to precede principals.