10/20/2004

Chrysler recalls Mini-vans

Another car company had to make a recall on one of its vehicles. This time it was Chrysler. It recently recalled its minivans made from 1998-2000. Apparently there is a potential defect with its passenger side air bag. It hasn't been determined approximately how much the recall will cost Chrysler, but surely it won't be cheap. In fact, they had to recall earlier models of their minivans due to the same defect.

An ethical dilemma like this will occur to probably all of us. It seems like more and more, companies are willing to recall vehicle with defects probably because of past settlements and litigation costs. In the past it may have been less expensive for a company to pay the law-suits, but the way things are changing, the cost of settling suits trumps the cost of fixing errors.

Overall, it seems like a good thing because it influences companies to act ethically in order to not only minimize costs but also increase revenues by pleasing consumers.

5 comments:

Bryce Larkin said...

I have also noticed that many car companies are starting to recall their defects in their cars. It is completely understandable because the companies don't want to have a law suit. I agree that recalling defects in cars will make more buyers more loyal to the cars they buy.

John West said...

Companies have been recalling defective vehicles for decades and it is due largely in-part to people like Ralph Nader that made it possible for firms to be held liable if they don't take the proper actions necessary to fix the vehicles. Chrysler, nor any other auto company, will ever make an error-free car and knowing this will surely have to make more recalls in the future. The important thing is that they continue to act in an ethical manner.

Maudi said...

I am glad that they would actually recall an auto, and I am glad that the cost is so much to settle a law suit that they have to recall a vehicle. Wouldn't it be terrilbe if the cost of law suits was cheap and then we never knew what kind of car had defects and we were driving around with them. Hopefully they will improve their process of checking out the vehicles before they sell them to the consumer, because I would hate to be the owner of the van and be the one to find out that the airbag doesn't work!

Dr. Tufte said...

Fixing defects is part of the strategic thinking about repeated games in Chapter 10. An automobile maker is trying to set up a continuing relationship with a customer. The customer's tit-for-tat response to not fixing a defect is likely to be to switch brands.

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