“My daughter’s dead because of a business decision.”
The daughter in question, Brooke Melton, was killed in an auto accident in Paulding County in 2010. Her parents are Ken and Beth Melton.
And the business decision that Ken Melton mentioned? That was made by General Motors, when it decided that fixing an ignition defect in hundreds of thousands of cars, including Brooke’s 2005 Chevy Cobalt, wasn’t worth the cost. As a GM internal memo put it at the time, “none of the solutions represents an acceptable business case.”
The part that would have fixed the problem would have cost GM less than a dollar per car. The cost of not doing so? Well, that was somebody else’s problem. In the case of Melton and at least 13 others who lost their lives, the faulty ignition turned off as the car was running down the road, freezing the steering wheel and deactivating the air bags that might have saved their lives.
And GM kept it quiet. It didn’t issue a recall until February 2014, when lawsuits, publicity and government investigations gave it little choice.
“I agree it took way too long,” GM CEO Mary Barra confessed to Congress this week. “It is tragic that there have been lives lost.” She also admitted that under previous management, the company had operated under a “cost culture” that prioritized profit over other goals, presumably including safety.
The failure of the National Highway Traffic Safety Administration to regulate aggressively also played a role in Brooke’s death. On two occasions, in 2007 and 2010, NHTSA’s Office of Defect Investigations faced a decision on whether to investigate GM; on both occasions it decided against it. It’s worth noting that since 2002, the ODI workforce has been slashed from 64 employees to 51 employees, and its budget has been frozen in the neighborhood of $10 million with very little increase since 2005. It processes some 40,000 consumer complaints a year.
A couple of other pertinent points:
— The “smoking gun” in Melton’s case came in the form of data downloaded from a “black box” installed in her car. The box preserves data from just before and just after a crash, and it revealed that her ignition had suddenly shut off, causing the fatal crash. That discovery has helped to force a recall of 2.6 million cars, and has undoubtedly saved lives.
The Obama administration issued controversial regulations in 2012 making such boxes mandatory in new cars sold after September 2014. When politicians rant about the cost of “anti-business” regulation and demand a ban on new rules, without even trying to distinguish between the worthy and the less worthy, that’s one of the rules they’re condemning. In effect, they are making the same “cost culture” argument that GM engineers made.
— The data from the black box in Melton’s car, as well as important information about GM’s prior knowledge of the problems, came to light only through a Georgia lawsuit filed against the company. Corporate lobbyists have fought hard in Washington and in state capitals to make such lawsuits harder to file and win, and to frustrate attempts by lawyers to gather evidence. In fact, a bill to make it more difficult to pry evidence from GM and other companies passed the Georgia House and was barely defeated in the Senate in the final days of the 2014 Legislature.
No economic system ever devised can match the productivity and quality-of-life improvements generated by capitalism. But it is equally true that without strong checks and balances, a system fueled by the single-minded pursuit of profit leaves too many innocent human victims in its wake.
