GM recalls made carmakers safety-issue sensitive, says Fiat Chrysler Automobiles CEO

Article by Andrew Christian, on May 26, 2014

The impact of General Motors' delay in calling back millions of cars over faulty ignition switches has prompted carmakers to become more sensitive to safety issues, remarked Fiat Chrysler Automobiles chief executive Sergio Marchionne. He remarked that it is high likely that carmakers will shift their attitude and become more prudent beyond what is required.

The United States Department of Justice, Congress, the Securities and Exchange Commission are investigating why it took GM around a decade before recalling 2.6 million Chevrolet Cobalts, Saturn Ions and other cars with faulty ignition switches.

The defect has been tied to at least 13 deaths. GM has so far issued 29 recalls this year, of which includes 11.8 million vehicles in the US. Marchionne remarked that the number recent recalls in the auto industry has been astounding.

He said that there must be a change in attitude inside the carmakers. Marchionne added that the cost of recalls could be shifted to consumers if their frequency as set by GM becomes the norm in the auto industry, resulting to more expensive cars.

The US National Highway Traffic Safety Administration recently had GM pay $35 million in fines for delaying the recall of vehicles with faulty ignition switches. Marchionne, however, remarked that the fine would not deter future safety issues from happening.

He noted that recalls like GM’s would give rise to reputational issues associated with the brand, adding that "it has to do with what we do as professionals." Marchionne’s Chrysler has recalled 1.7 million vehicles in the first three months of 2014 after calling back 4.1 million in 2013.

The carmaker has even tapped consultants who are now reviewing its recall process, Marchionne disclosed. He said the review process will allow Chrysler to see if it is all the right things and to see if there is something the recall committee can improve on. [source: automotive news europe - sub. required]

Topics: gm, recall, fiat, ceo

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