With the federal probe it faces now for the mishaps in its ignition switch recall, GM could remain in the eyes of the public with the matter at least six months – not a very good deal when it comes to reputation.
The National Highway Traffic Safety Administration could fine GM with $35 million if it concludes in its investigation that GM handled badly the timing of the ignition switch recall that relates to 13 fatalities and 1.6 million cars. The big problem though is the cost of the lawsuits that are going to follow from the probe and recall.
“They need to get past this as quickly as possible,” said George Cook, a marketing professor at the Simon Business School at the University of Rochester. “You cannot be reactive in dealing with the American car-buying public,” added Cook. “You have to be proactive and I think they’ll be forgiving if it’s not really, really serious. People have short memories about that stuff.”
The recall involved nearly 1.6 million vehicles which had a condition that might allow the engine to be unintentionally turned off – a big safety hazard, as no power means such features like steering wheel assistance, ABS and airbags are also non functional.