1. Despite having a low temporal immediacy, a low proximity of effect, and a low concentration of effect, GM’s faulty ignition switch problem has a very high degree of ethical intensity. Why?

2. What can GM do to help improve its ethical decision-making?

3. To whom is GM socially responsible under 

a. The shareholder model? 

b. The stakeholder model?

Product recalls are common. From consumer products to food and health items, it is common for a company to ask customers to return a product after it has been purchased due to significant, and sometimes deadly, problems that were not identified until after the product was sold. 

Product recalls are very costly. Costs include advertising and coordinating the recall, collecting and managing the returned product, replacing or repairing the product for the consumer, decreased sales due to damaged brand image, and possibly lawsuits and other fines arising as a direct result of the original reason for the recall. Due to the incredible expense of conducting a recall, recalls are used as a final resort. 

In February 2014, General Motors (GM) issued a recall for 800,000 cars. Over the next several months, GM continued to recall vehicles until, by June 2014, nearly 30 million cars had been recalled worldwide. The issue was a faulty ignition switch that could shut off the engine while driving and disable the airbags, preventing them from inflating. The replacement cost of the faulty switch was $0.57 per unit. The recall cost GM more than $3 billion in shareholders’ value