Crime and Business: Negligent Tort

 

CarOn June 29, 2014, the General Motors Company recalled thousands of vehicles which are said to have faulty mechanics and parts which have led to or have been the cause of serious or fatal injury to consumers.

The models affected are: 1997-2005 Chevrolet Malibu; 1998-2002 Oldsmobile Intrigue; 1999-2004 Oldsmobile Alero; 1999-2005 Pontiac Grand Am; 2000-2005 Chevrolet Impala and Monte Carlo; 2004-2008 Pontiac Grand Prix. The problem?  Reportedly, the ignition key can be bumped out of run position while driving [See: CNN Report| Every General Motors recall in 2014], and it is estimated that as many as 7,610,862 million vehicles are at risk nationwide. Consequently, as noted in news reports there is negligence on behalf of the GM employees; as well, as their CEO, Mary Barra who is accused of covering up faults in the installation of ignition switches the vehicles. This article will show where corporations, notably General Motors, failed or are neglectful and which might reportedly have led to civil action suits against them; hence, the elements of discussion are:  (a) Duty of Care, (b) Standard of Care, (c) Breach of Duty of Care, (d) Actual Causation, (e) Proximate Causation, (f) Actual Injury, and (g) Defenses to Negligence.

The General Motors Company apparently is no stranger to such recalls as this, however, not to such a magnitude because according to the list there have also been a number of recalls; not only for June, but also beginning with February 2014 through September 2014. According to Seaquist (2013) there are at least involved in the Duty of Care, or Reasonable Personal Standard (Seaquist, 2013) which speaks of the standard of behavior expected of a person in a particular situation. For example, there are at least 230 [including fifteen fired] employees accused in the suit, and as mention the CEO.

The article, “GM Admits Incompetence, Negligence Led to Delayed Recall,” disclosed GM’s lack of Duty to Care:

Last month, GM paid a $35 million fine — the largest ever assessed by the National Highway Traffic Safety Administration — for failing to report the problem quickly to federal regulators. GM knew about problems with the ignition switches as early as 2001, and in 2005 it told dealers to tell owners to take excess items off their key chains so they wouldn’t drag down the ignition switch. In 2006, an engineer at GM approved a change in the switch design, but didn’t inform the government or change the corresponding part number. In subsequent years, that made it harder for other GM engineers to figure out why older Cobalts’ performed worse than newer ones (The Associated Press, 2014).

In this case, there is a burden of proof for the defendants for them to prove that they are not negligent, according to Seaquist (2013) who wrote concerning the Statutory Duty of Care.

There certain elements:

  1. Defendants have burden of proof to prove they were not negligent.
  2. Plaintiff must prove that the defendant failed at the duty of care.

There is also the element of Foreseeability [actual causation] and Proximate Causation which is direct causation, or the breach of the Duty of Care, or rather the circumstance of negligence which caused the injury and this includes foreseeability which begs the question of whether the defective part was known beforehand. In essence, knowing the part was faulty, and also knowing the consequences beforehand; yet, still allowing the cars out for sale causing injury to consumers (Seaquist, 2014).

Here is the premise, for example, is it foreseeable that people who buy cars have a tendency to add other objects to their key rings, and can be a problem with an already faulty ignition switch? According to the Associated Press article, GM knew and yes they knew there would be a problem, because they apparently recalled vehicles before for the same thing:

A new article stated, “In 2006, an engineer at GM approved a change in the switch design, but didn’t inform the government or change the corresponding part number. In subsequent years, that made it harder for other GM engineers to figure out why older Cobalts performed worse than newer ones. In May, GM recalled another 2.7 million vehicles for various issues. The bulk of the recall was for Chevrolet Malibu cars from 2004-2012 as well as the 2004-2007 Chevrolet Malibu Maxx, 2005-2010 Pontiac G6 and 2007-2010 Saturn Auras, all to modify the brake lamp wiring harness” [The Associate Press, 2014].

The last thing on the list to find negligence on the part of the manufacturing company General Motors is the industry of care which would give reference to expert opinion. Notably, there were also investigations initiated in notice of interviews, and firings which subsequently resulted from those. In the article, “General Motors releases delayed recall investigation, cites negligence and incompetence” Barra reports the finding of the experts in the scandal. The Daily News stated, “In 2006, GM engineer Ray De Giorgio – who designed the switch – approved a change in the switch design, but didn’t inform the government or change the corresponding part number. In subsequent years, that made it harder for other GM engineers to figure out why older Cobalts performed worse than newer ones. Barra confirmed Thursday that two employees placed on leave in April have been fired; De Giorgio was one of those employees.” (The Daily News, 2014). Hence, the manufacturer is in a jam as far as the defendant proving lack of neglect, because they have admitted their part, and as the article stated paid a hefty fine as a result.

Some forms in Defense of Negligence are: (a) Contributory negligence, (b) Comparative negligence or assumption of risk, and (c) Pure Contributory Negligence. The first contributory is where the plaintiff along with the defendant is responsible. In essence, as Seaquest (2013) noted about the snow on the walk, that is yes it is the business owners duty to make sure the snow is shovel, however, if there is snow on walk why did the plaintiff walk on it.  Could he have gone around? Did the customer have to use that business? Who knows? Hence both have a part, although the defendant might owe the greater responsibility for the injury because he did not shovel the walk (Seaquest, 2013). Secondly, Comparative Negligence would stem from the plaintiff help with his injury. Hence, if the defendant sued for two million dollars, and a jury decides that the plaintiff should pay a portion then that total is subtracted from the total award and the plaintiff wins the remained. In example, 2 million – plaintiff deduction/part = remaining award. In the Pure Comparative, the law agrees that the irresponsible party wins something no matter if the accident was caused by the defendant; however, the plaintiff’s award is greater.

Concerning Consumer Protection [ which is mentioned briefly], it is all important and is law which protects customers from harm. Seaquist (2013) wrote:  Strict Liability in Tort In contrast with absolute liability, strict liability is a recently developed theory in law that holds manufacturers, wholesalers, and retailers liable for defects in the design or manufacturing of products that render such products unreasonably dangerous to the intended users (Seaquest, 2014). Consequently, GM has to face Congress on their negligent acts and failure to protect the public they serve [Read: General Motors executives to face Congress over car recall scandal]  in their efforts or lack of thereof in keeping their Duty of Care.

 

 

Sources:
LIABILITY OF AUTOMOBILE MANUFACTURERS FOR UNSAFE DESIGN OF PASSENGER CARS

Business law for managers. San Diego, CA: Bridgepoint Education, Inc.

General Motors releases delayed recall investigation, cites negligence and incompetence

GM Admits Incompetence, Negligence Led to Delayed Recall. Mashable. Business

Money Every General Motors recall in 2014 

   Conflict Identification and Resolution: General Motors and Government Involvement

images (1) During the General Motors bailout crisis the public sentiment was one of enragement concerning government intervention. Notably, for some the outcry was [seemingly] there goes the government again sticking their nose in where it does not belong, however, for many with jobs at stake the intervention was one of relief from vast layoffs within the company. Hence, the government’s intervention, although not popular brought relief for many. Conversely, the outcry might be one of ignorance for some. It is the case, that the government has always been involved, not solely with General Motors, but with the transportation industry collectively as a shareholder, and this is the reason for their intervention to protect their investment. Baack (2012) concerning the nature of negotiations and bargaining stated two points of interest, that negotiations are a ‘give and take decision’; and negotiations can be a ‘win-win’ for both parties [The Nature of Negotiations and Bargaining Processes; para 2]. Therefore, the General Motors Company allowance, or rather, acceptance of intervention government diverted further injury to the public, the transportation industry as a collective industry; as well as, the government who were shareholders[and who] negotiated with General Motors, rather than a so called barge-in type scene as the public regarded.

Baack (2012) wrote there are three areas to consider in a negotiation; and asks the question concerning preconditions, “Does negotiation present the best option?” The thoughts to consider in this instance are: (a) the psychological climate, (b) the availability of resources, and (c) the characteristics of the bargaining issue. Hence, all these combined should lead to what Baack (2012) considers to be a win-win solution, or rather, an ‘Integrative Negotiation’ process.” [The Nature of Negotiations and Bargaining Processes; para 4].

Considering the availability of sources, becoming a stakeholder allows that the government experts have input into safety standards which for GM obviously were an issue, those along with financial problems. Notably, armed with resources needed, as like money, the US government’s help was well needed. Additionally, it is a give and take type scenario which took place which said, You [General Motors] allow me [US Government] to buy shares in your stock and I [US Government] will in turn bail you out of trouble to avoid a bankruptcy; a win-win. In the article, “5 Keys of Dealing with Workplace Conflict,” Mike Myatt (2012), a contributor to the Forbes blog wrote, “Don’t fear conflict; embrace it – it’s your job.” While you can try and avoid conflict (bad idea), you cannot escape conflict. The fact of the matter is conflict in the workplace is unavoidable. It will find you whether you look for it (good idea – more later) or not. The ability to recognize conflict, understand the nature of conflict, and to be able to bring swift and just resolution to conflict will serve you well as a leader – the inability to do so may well be your downfall. (Myatt, 2012. para.1).  General Motors faced bankruptcy as a solution to its problems. Notably, filing bankruptcy can denote one of two things, (a) relief for businesses and individuals who have no other recourse from creditors, and (b) a means of escape from creditors for those who have acted irresponsible. Hence, for General Motors a bankruptcy would not be a good idea because of shareholders, employees, or the public citizens in regards to purchase of cars out on the street.

In the article, “Government fines GM maximum $35 million for delayed safety recall’, author wrote:

GM will pay a $35 million penalty — the maximum allowed, and the largest ever imposed on an automaker — and will be required to make wide-ranging changes to its safety practices that will be supervised by the government, another first for an automaker. “What GM did was break the law,” Anthony Foxx, the secretary of transportation, said at a news conference. (Wire Reports, para. 2).

Notably, in the instance in the industry of transportation the government as a saving factor is seen all around, because not only was GM in trouble financially, but the public as well. This analysis is great because clandestine activity is brought into the light and presumably had it not been for the government’s intervention some activities might never have been seen. In addition to fines, there is also note in the article about employee training going forth which is great for public safety.

Baack (2012) spoke about preconditions to negotiations. In this we note that the government’s pronouncement about the trade of stock and their help allowed for further examination of the companies policies, safety procedures and other issues of concern. Hence, Baack gave a list of preconditions that had to happen; otherwise, no solution will come. He calls the list psychological climate which includes:

  1. Willingness to participate in negotiations
  2. Readiness to negotiate
  3. Agreement on some issues
  4. Willingness to settle
  5. Sense of urgency [The Psychological Climate Section; para. 1]

Baack (2012) wrote, “A stakeholder is a person or group with a vested interest in the outcome of a negotiation. These individuals should tangibly demonstrate their readiness to be seated at the bargaining table. If a stakeholder group is absent or unwilling to commit to good-faith bargaining, the potential to find a viable solution is reduced.” [The Psychological Climate Section; para. 2]. One can surmise, then, that the government’s strategy to become a stakeholder gave them considerable influence in the goings on of the business. Hence, people must realize that government as a shareholder served two purposes: (a) to allow them a stake and profits, and (2) allowed them further insight in company structure. Hence, as shareholder, the government is not only entitled to financial records, but unlawful practices as well which is very good indeed; because, even after selling the stock off the stigma of unsafe practices and unlawful activity allows the government the ability to make decisions for GM’s inability to keep cars safe. Hence, the resolution is continual monitoring by the government.

It is the case, that all activity, compromise, resolution and so forth would not be possible had it been for the governments’ resources, the money, the experts and General Motors willingness to negotiate with them. Moreover, Baack (2012) wrote about the ‘Availability of resources,’ giving the means of influence in negotiation:

  1. Legitimate
  2. Reward based
  3. Coercion
  4. Expertise
  5. Charisma [Means of Influence in Negotiation Section; Table 7.2].

For this purpose, legitimate, coercion, and expertise will discussed, because of the gravity of the negotiations. Therefore, a concern in the negotiation efforts on GM’s part would be ownership and patent protection in regards to implied take over; along with their need for other expert opinion and know how, other than their own, which the government provided with analysis of the situation as a whole, that is, in the area of safety, finances and public concern were all laid out in the open. To understand coercion, one might look to the fact that had not car makers decided to take the government up on the offer there might have been a halt to the transportation industry. However, as it stands the loss revenue, damaged relations with customers all stand, because of faulty products. Additionally, had the offer not been accepted by General Motors then the government might have used coercion as a persuasive technique to investigate the company without incentive.

In conclusion, the steps of conflict resolution as Baack (2012) wrote are thus:  (a) Identify the parties involved, (b) Identify the issues, (c) Identify the positions of the parties, (d) Find the bargaining zone, and (e) Make a decision.[ The Steps of Conflict Resolution Section; para. 1]. Hence, the negotiations between the General Motors Company and the US Government are met by acceptance of the government proposal to help, and in turn allowing the government to become stakeholders; which in turn, allowed the government to bring in expertise in financial discovery, as well as, expertise in matter of safety. For General Motors, the need for continued monitoring is needed in compliance to the law and for safety of its customers. However, the matter of a government barge in is far from truth as is the impression for some Americans. It is therefore the case, that a least in this instance the government did the right thing after all.

 

Sources:

 

Baack, D. (2012) Organizational Behavior. Retrieved from https://content.ashford.edu/books/AUBUS610.12.1/sections/sec6.1

 5 Keys of Dealing with Workplace Conflict. Forbes. 

 Government Motors no more

Government fines GM maximum of $35 million for delayed safety recall