The auto industry has been a victim to cases where a handful but the most powerful names have been involved in cover-ups and criminal negligence in a bid to maximise profit.
Cars are a beautiful creation of mankind that connects with some who understand it, while it has been a tool for others revolutionising mobility. That being said, manufacturing vehicles is also a business that can sometimes make even the biggest of corporations stoop down to the pits to maximise profits. The latest Volkswagen diesel engine emissions scandal in the US turned out to be another such exposé that involves over 11 million cars being affected and could cause the automaker pay fines amounting to $18 billion (Rs. 1,22,914 crores). As disappointing as it may look, we list down some of the prominent automotive scandals that managed to question work ethics in these companies.
1) GM Faulty Ignition Switch Recall – The General Motors cover up saw faulty ignition switches on the Chevrolet Cobalt and other models to shut off at speed, thereby deactivating safety systems like airbags and ABS that led to potentially fatal accidents. GM already knew about the defective component as early as 2004 and having found that it would be too costly to fix the issue, just left the defective cars plying on roads. Till date, the faulty ignition defect has been linked to deaths of at least 124 people and about 275 serious injuries, whereas the company was found liable for misleading customers and the government. GM faced a civil law suit of $10 billion and had to recall 2.6 million vehicles to replace the defective component.
2) Takata Airbag recall – In 2014, safety component maker Takata Corporation was found to have fitted defective airbags that were manufactured between 2000 to 2008. Easily one of the biggest scandals to hit the auto industry at large, Takata’s clientele included 10 of the biggest automakers in the world and around 17 million vehicles. The faulty airbags could be affected by moisture and blow in excess force possibly shooting shrapnel and chemicals on occupants causing fatal injuries. In this case too, Takata and Honda were aware about the fault as early as 2004 but did not act on the same. The US government slapped a $70 million fine on Honda for the same and Takata $14,000 for each day of not cooperating with the federal investigation. The defective airbags have been linked to at least eight deaths and over 100 injuries globally.
3) Toyota Unintended Acceleration – Known for its reliable vehicles, a startling controversy brought Toyota’s unethical practice to light when cars from Toyota and Lexus had unintended acceleration issues. The problem was first recorded in 2009 but the automaker constantly denied the defect calling it driver error. It later went on to suggest that the uncontrolled acceleration was caused due to the floor mat blocking the return of the gas pedal. In reality, the company was aware of the defect as a the faulty gas pedal assembly caused the acceleration. In 2012, Toyota agreed to the fault and was slapped with the largest criminal penalty of $1.2 billion in the US. The incident saw over 12 million vehicles being recalled and cost the automaker an additional $2.4 billion.
4) Ford Explorer-Firestone Tyre Defect – In 2000, Ford and tyre maker Firestone were in a fix after the NHTSA investigated both the companies due to a high rate of tyre blowouts that led to the rollover of the very popular Explorer SUV causing several fatalities. Here, Ford blamed Firestone for the problem and vice versa, which led to the termination of the 100 year old partnership. Firestone alleged that heat, low tyre pressure and the Explorer’s weight and handling characteristics caused the tyre burst, whereas Ford said it did not have enough confidence in the future performance of the tyres. While neither of the companies claimed full responsibility, the tyre bursts was the reason for over 100 deaths globally and saw 6.5 million vehicles and 13 million tyres being recalled.
5) Audi Unintended Acceleration – Back in the late 1980s, Audi AG was embroiled in a scandal that managed to single-handedly blow up the company’s reputation and sales in the North American market. The Audi 5000 was a popular sedan that helped the company build its luxury brand image but was accused of unintended acceleration in 1986 after news channel CBS aired a news report exposing the same. It was later proved to be just sensational journalism accusing the sedan of mowing down people due to uncontrollable acceleration. In 1989, the NHTSA cleared Audi of the charges and the cause of the acceleration was found due to smaller European-style brake pedal that was closer to the accelerator. In effect, the fault was due to a driver error and not because of a vehicle defect. However, the damage was done by then and Audi’s sales in the US had dropped from 75,000 units in 1985 to 12,000 units in 1991.