On GM, Toyota, politics, and the neglect of safety

by Walter Olson on June 12, 2014

I was a guest Tuesday on the Roger Hedgecock program at the San Diego Union-Tribune, discussing the way Washington, D.C. seems to have come down at least as hard on Toyota as on General Motors, maybe harder, even though the safety shortcomings falsely attributed to Toyota appear actually to be present in the GM case.

One striking feature of the GM story is the extent to which a culture of putting as little as possible on paper appears to have undermined GM’s capability to grasp the scope of the safety problem with the flimsy ignitions and their relationship to nonfunctional airbags. Bill Vlasic of the New York Times reports:

To the legal department at General Motors, secrecy ruled. Employees were discouraged from taking notes in meetings. Workers’ emails were examined once a year for sensitive information that might be used against the company. G.M. lawyers even kept their knowledge of fatal accidents related to a defective ignition switch from their own boss, the company’s general counsel, Michael P. Millikin.

As I’ve often noted, organizations gripped by fear of legal consequences or hostile oversight often develop a “put as little as possible on paper” mentality, even though such a mentality regularly proves counterproductive to the organization’s mission by fostering ignorance and lack of coordination and allowing bad practice to take root.

{ 8 comments }

1 William Nuesslein 06.12.14 at 5:26 am

It is my understanding that FBI forensic evidence folks deliberately destroy intermediate paper to have their reports speak for themselves. Forensic evidence evidence give verbal heads up to plaintiff lawyers as to their likely testimony.

I am dismayed when our president improperly uses his power to shake down folks as Al Sharpton and Jesse Jackson do. Think BP. Thugs are thugs.

2 Max Kennerly 06.12.14 at 7:34 pm

“Organizations gripped by fear of legal consequences” is a nice euphemism for “organizations that choose to express contempt for consumer safety yet vigor for evading accountability because they make more money that way.”

3 Walter Olson 06.12.14 at 8:03 pm

You can put it that way if you like, but I think you’ll find much the same syndrome within many public-sector and nonprofit organizations that grow a similar shell from the regularity with which they are litigated against and put through other sorts of hostile records requests.

4 Walter Olson 06.12.14 at 8:07 pm

While we’re at it, as I noted in my first book, lawyers explicitly defend their privilege against disclosing work product by pointing out that if they had to stop putting frank opinion to paper for fear of having to disclose it in discovery, they’d have more trouble representing clients well. I’m just pointing out that the same considerations apply to non-lawyers.

5 Max Kennerly 06.12.14 at 11:11 pm

My statement would apply to any organization that engaged in the same behavior of elevating “cover your ass” over “do no harm.” It’s ludicrous to claim that trial lawyers and tort law are at fault here for forcing poor little GM into putting a bunch of death traps on the road. It’s no better than saying that harsh penalties for crimes “cause” more obstruction of justice and witness tampering — how about we focus on the bad behavior in the first place?

Considering that the word “incentives” has magical powers among conservatives in fields as far flung as welfare and oil drilling and tax policy, how about we apply it to tort law: your incentive to not make a death trap is that you have to pay for it.

The irony here is that tort litigation is a drop in the bucket for companies like GM. Their concern is more NHTSA and DOT and, more than that, bad press. You can make them wholly immune and they’ll do this just the same — likely more, IMHO, and with the problems coming to daylight less readily.

6 William Nuesslein 06.13.14 at 4:56 am

Good grief, Max Kennerly, traffic deaths dropped from 50.000 a year in the 1980s down to 30,000 a year now. Most of that improvement was due to seat bealts and engineering. NOT AIR BAGS. I saw the result of energy absorbing auto bodies and good seat belts when my car was totaled in 2009.

The ignition switch hoopla drives me nuts. Wear in the switch should have been noticeable to drivers. Every mechanical system is subject to wear. 13 deaths out of 300,000 traffic deaths is at the edge of detectability. “Death Traps” is idiocy.

Ted Franks thoughts would be interesting.

7 Walter Olson 06.13.14 at 11:38 am

William, if my understanding is right, the ignitions were unsuitably flimsy from day one, not just after years of wear, and vulnerable to being shifted to auxiliary power position through knee knocks or the weight of a heavy keychain. While I agree a design problem of this dimension might sometimes be at the edge of detectability if accident stats were all GM had to go on, the fact is that the company did get multiple reports from the field (including its own people) identifying the problem.

The issue was not expensive to fix and according to news reports GM in fact did order many other recalls that were more expensive, yet had less of a safety payoff, than this recall would have had. That is one reason I find the evidence (so far) compatible with an incompetence theory, in which GM had saddled itself with such bad internal processes and management culture that it failed to make intelligent use of the information on hand to pursue its own management objectives. But who knows — maybe the lawyers will succeed in portraying GM execs as villains who knew just what was happening and cackled atop their gold piles while twirling their mustaches. That’s the version the juries will get to hear, most likely.

8 mf 06.16.14 at 3:19 pm

Max: Re: “death traps”. Hyperbolize much? (I know it’s not a word, but you get the idea.)

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