General Motors Like a Rock
General Motors provided a videotape of the Harry Pearce press conference with retractions by NBC and acceptances by GM. Also available from GM were two videotapes of Michelle Gillen’s interviews with a GM engineer and an attorney representing GM in the Moseley case. The contact was: Mr. Ed Lechtzin, Director of Legal and Safety Issues, GM Communications Staff, New Center One Building–7305, 3031 West Grand Boulevard, Detroit MI, 48202. A segment on the GM pickup trucks was broadcast on the McNeil-Lehrer Report, November 30, 1993.
The issue has three components: 1) the dispute over the safety of the pickup trucks, 2) the Dateline program, and 3) the public’s perspective on this affair. The issue that underlies all of these is safety.
With respect to the Dateline segment, it is clear (from the information presented in the case and subsequent disclosures) that NBC had fabricated the explosion and fire. GM concluded that this was the case, and management was incensed by NBC’s false presentation.
One alternative was to do nothing, and that was what some media advisors frequently advocate; i.e., get the issue out of the public’s eye. In this case, however, GM should address the issue directly. In addition to the recent court judgment against GM, politicians and regulators might become more active on this issue. It is unlikely to go away, and activists would work to make sure that it does not. Indeed, the Center for Auto Safety planned a news conference in a few days.
A major decision for GM was whether to take this issue to the public or to deal with it behind the scenes. At some risk, GM decided that the right thing to do was to present its information to the public. Another alternative was for GM to file a defamation suit against NBC News, which GM did. In this case, GM had quite a good opportunity to win, since it is clear that NBC fabricated the fire, falsely reported the events, and knew it
was doing so.
In the case of the GM pickups, NHTSA accident data indicated that for a year of driving the odds of dying in an accident in a GM pickup with exterior mounted gasoline tanks are one in 6,605, whereas the odds of dying in a Ford heavy pickup are 1 in 6,916 and for a Dodge the odds are 1 in 8,606. For a Nissan light pickup the odds are 1 in 4,521. Heavy pickup trucks were considerably “safer” than passenger cars.1
One concern with the NHTSA accident records was that they do not control for how the vehicles were used, which could affect the frequency with which they were involved in accidents. A more informative approach would be to examine how safely the vehicle protects the passengers in an accident. Data from a study of fatal and major injury accidents indicated that per 1000 collisions GM C/K pickups had a lower rate of fatal and major injuries than did either the Ford F-Series pickup or the Dodge D/W Series Pickup. The frequencies are: GM 33.82, Ford 34.30, Dodge 35.21. For side impact collisions the frequencies of fatal or major injury were: GM 23.03, Ford 23.59, and Dodge 25.53. No statistical test, however, was likely to show that GM pickups were less safe than Ford or Dodge pickups. Newsweek titled the article cited in the previous footnote, “Just as Safe at Any Speed.”
Regardless of these data, safety activists argued that the GM pickups should be recalled. Their viewpoint was that if a hazard can be eliminated then it should be eliminated. NHTSA asked GM to voluntarily recall the C/K pickups, and it refused to do so. Secretary of Transportation Pena then announced a mandatory recall of the GM C/K pickups, and GM filed a lawsuit challenging the basis for that action. The Secretary quickly backed down, and GM and the Department of Transportation reached an accord settling the issue without a recall and with terms judged by observers to be quite favorable to GM.
Assignment Questions (30%):
1. Identify and explain the 4I’s based on the case.
2. Discuss the roles of news media in the business environment. 3. Should GM file a defamation lawsuit? If so, why, and what else should it do? If not, why not, and what should it do instead?
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