Forward Observations: How Not to Handle a Recall

Product recalls are not unusual. In the U.S., most product categories—from baby carriages and food to toys and automobiles—have had one or more. To undergo a recall is not automatically a sign of failure. But to have one and not determine the root-cause reason for the recall and swiftly correct the problem it represents goes against all principles of world-class manufacturing. 

This is where we are with General Motors (GM) and its ignition-switch problem. The automaker has dominated headlines lately, not because of the now-obvious need for a recall (to correct the improperly designed ignition-switch part that allowed a running engine to stop unexpectedly) but for its long delay of the recall. As news reports have covered, the low-cost part was known to be defective in 2001, but GM decided—in 2005—to not replace it. Since then, it’s been determined that 13 deaths and 31 injuries were caused by the faulty component,  a fact GM ignored until the government came calling earlier this year. An investigation is underway.

Corrective actions taken so far include placing on paid leave two engineers believed to have been directly involved with the switch design (and related poor decisions), and adding more in-plant product-safety investigators. It remains to be seen how GM will address the larger issue of overhauling a company culture that allowed such a situation to develop in the first place—and then let it fester for a decade. Although I’m not familiar with the culture at GM, I have visited many world-class manufacturing operations and find it hard to imagine any of them allowing such a situation to exist. The world-class culture is built on a team-minded pursuit of continuous improvement, along with accountability and regular communication at all levels. These elements may have been in place at GM, but clearly not throughout the company. The fact that death could result from a design or production error in almost any part of GM’s output and not be enough to keep everyone on their toes 24/7 is indefensible.

Had GM leaders acted to correct this problem when they should have, they might have reviewed the famous 1982 Tylenol poisoning case for guidance. Considered the textbook example of how to handle a dangerous recall, it involved cyanide-laced Tylenol capsules that appeared on Chicago-area shelves and caused seven accidental deaths. Maker Johnson & Johnson (J&J) swiftly quelled fears by voluntarily recalling 31 million bottles of the pain killer (huge for the time) and offering free replacement product, even though the company was not at fault. Predictions of doom for the brand faded as J&J guided its market resurgence by doing everything possible to reassure consumers of its sincerity. The new tamper-proof packaging it introduced after the scare convinced consumers the company was looking out for them.

GM has missed the opportunity to take similar charge of its own story. On the defensive, CEO Mary Barra has had the rock/hard-place task of answering to the government while treading an unmapped minefield created by her own company. Her short-term solution for those stuck with the bad switch (remove all other keys from the key ring…) came so late in the game it nearly trivializes the issue. Her best hope to salvage her career and restore consumer/investor belief in GM is to change the company’s culture so similar problems never get this far down the road again. It can be done. But will Barra have time to do it? Will her successor? My crystal ball clouds.