Term Paper: Individual Automobile Safety Technology Engineering

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[. . .] Both of these provisions point to the important of after sales activity with regard to attracting and retaining customers ("KPMG," 2012). Retailer profitability is substantively impacted by after sales service of automobiles, but the possibility of differentiation in this arena is difficult and remote ("KPMG," 2012). However, the evolving technology trends in the industry may provide a boon to retailers ("KPMG," 2012). For instance, as data is collected from connected vehicles, the opportunity is made available to identify the servicing needs of vehicles and to schedule servicing appointments in advance ("KPMG," 2012). This enable a degree of personalized service that consumer respond to very positively since it makes them feel as though they are receiving personalized service and, overall, it does make their lives a bit simpler and easier ("KPMG," 2012). These conveniences also apply to businesses in which fleet management is a dominant concern ("KPMG," 2012). A retailer's ability to differentiate through the provision of business class service is also tied to the volume and resultant profitability the retailer will experience ("KPMG," 2012).

The auto industry experiences significant loss due to product recall. In 2010, for instance, Toyota Motor company reported that the massive recalls of their vehicles that were the result of gas pedal problems could cost the company a total of $2 billion (Reuters, 2012). Moreover, also in 2010, General Motors (GM) announced that it would recall at least 38,000 of its vehicles due to a crash risk, which would result in a substantial blow to profits (Reuters, 2012). Consumers are growing increasingly impatient with automakers' recalls of vehicles and litigation is rising -- particularly against a background of the rather terrifying failures of vehicle electronic systems that put peoples' lives in peril (Reuters, 2012). The news is regularly flooded with automobile recall information. Consider the summarization below and the fiscal implications on the industry, plus any associated losses as a result of the lost work time and other inefficiencies. Toyota Motor Corp recalled more than 7.4 million vehicles worldwide when it learned that a faulty power window switch could be a fire hazard (Reuters, 2012). This was one of several setbacks for Japan's biggest automaker, including a series of recalls of more than 10 million vehicles in 2009 to 2011, and fairly crippled the automaker's attempts to restore its reputation for quality (Reuters, 2012). Moreover, Toyota's supply chains were crippled by Japanese tsunami and by the floods in Thailand (Reuters, 2012). As recently as March 2012, BMW announced that it was recalling about 1.3 million cars globally problems with a battery cable cover located in the trunks of 5-Series and 6-Series BMWs built between 2003 and 2010 (Reuters, 2012). In September 2011, Honda announced plans to recall 960,000 Fit subcompacts and other models across the globe in order to repair defects that were found in malfunctioning power window switches and other components (Reuters, 2012). In May 2011, Honda was forced to expand its earlier recalls of both Honda and Acura vehicles when it learned that airbags that could deploy with too much pressure (Reuters, 2012). This risk of airbag caused injuries or fatalities resulted in the recall of more than 833,000 additional vehicles built between 2001-2003(Reuters, 2012). As Honda widened its airbag recall four different times since the first such recall in 2008, the number of vehicles affected has reached 1.65 million (Reuters, 2012). In January 2011, Toyota announced a recall of more than 1.7 million vehicles globally, which advanced its recall numbers to nearly 16 million since late 2009(Reuters, 2012). In October 2010, Toyota recalled a total of about 1.66 million vehicles that had primarily been sold in Japan, the United States, and China (Reuters, 2012). The recall was in response to problems with brakes and fuel pumps (Reuters, 2012). In October 2010, BMW voluntarily recalled 350,000 cars worldwide when it discovered that there were possibly problems with brakes in the 5-Series, 6-Series, and 7-Series models that were built since 2002 (Reuters, 2012). In August 2010, Toyota recalled 1.3 million Corolla and Matrix cars that were built from 2005 to 2008 in the United States and Canada (Reuters, 2012). In June 2010, General Motors announced that they would recall 1.5 million trucks, crossovers, and cars that were built from 2006-2009 due to the fact that a heating unit for the windshield washer fluid could catch fire (Reuters, 2012). In March 2010, General Motors reported the need to recall 1.3 million compact cars that were manufactured between 2005-2010, including the Chevrolet Cobalt, the Pontiac G5, the Pontiac Pursuit, and Pontiac G4, with each model located in a different country (Reuters, 2012). In January 2010, Toyota had to call back 5.6 million vehicles over a series of recalls in the United States because of sudden acceleration in some vehicles.

Business vs. ethical considerations. Making the right decision in business often comes down to determining if a decision will be guided by ethical considerations or profit margin and corporate reputation. Occasionally, a business dilemma will be solved in a manner that bears the earmarks of deliberate, conscious top-down corruption. An illustrative example is the case of the Ford Pinto. Ford designed and manufactured the compact Pinto during the 1970s. However, the car was plagued by as serious problem -- if it was involved in a rear-end collisions, the Pinto would leak fuel and explode into flames. Before Ford had issues a formal recall to correct the dangerous problem, more than two dozen people had been injured or killed in fires that followed the occurrence of a rear-end collision. Follow-up investigation revealed that Ford had responded to intense competition from Volkswagen and other small-car manufacturers by rushing the Pinto launch into production. In fact, in crash tests before the Pinto was actually in production, Ford engineers discovered the potential hazard presented by the ruptured fuel tanks. Nevertheless, with the assembly line ready for the production, Ford's executives decided to proceed with the launch. The decision was a deception driven by greed and it was deeply unethical. Consumers who later learned of the debacle considered it to be representative of the automakers' callousness and dishonesty. However, if one separates ethical considerations from business decisions, the choice made by Ford leaders could well be considered prudent.

Cost-benefit analysis by government. The cost of car accidents in the United States is approximately $164.2 billion annually (Scheid & Chavis, 2012). The average cost to all U.S. drivers is roughly $1,000 each year (Scheid & Chavis, 2012). The Texas Transportation Institute asserts that, "Traffic congestion costs the nation $67.6 billion each year, or $430 per person" (Scheid & Chavis, 2012). Interestingly, the costs of Traffic congestion are much less that the cost of car accidents themselves, but people tend to be more concerned about traffic congestion than what they perceive as more remote chance that they will be involved in an auto accident (Scheid & Chavis, 2012). Yet, AAA reports that, "over 43,000 people die each year from caraccidents…[however]…the annual tally [cost] of motor vehicle-related fatalities barely registers as a blip in most people's minds" (Scheid & Chavis, 2012). Research indicates that, "Urban areas with more than 3 million residents pay two times the cost of congestion for crashes, while in areas with less than 500,000 residents, the cost of car crashes rises to 7 times the cost of congestion" (Scheid & Chavis, 2012).

When actively using technology while driving their vehicles, drivers are likely to drive up the risk -- the inherent hazards of using gadgets and options in moving vehicles. Cost-effectiveness studies in these situations are difficult for legislators and safety experts to accomplish. A broad array of factors and seemingly endless situational variations makes the task extremely challenging and potentially inconclusive (Sperber, et al., 2010). One study on the use of cell phones determined that, from a societal perspective, a ban on cell phone use would promote health and safety more than it would impact costs associated with mobile phone use -- such as the inefficiency of having to wait to use one's phone for business, or any reduction in market demand due to these restrictions (Sperber, et al., 2010). Interestingly, the health economists who conducted this study monetized health benefits; that is, they attached a projected fiscal cost to the prevention of accidents that result from the use of cell phones in moving vehicles. However, economists and society in general do not always share the same perspective regarding the saving of lives and the prevention of injury. Indeed, consumers may hold health and safety as a paramount concern to be addressed by manufacturers -- and the market is likely to reflect consumers; values.


The tension between business and ethics -- such as that robustly illustrated by the Ford Pinto debacle -- fits extraordinarily well with the consideration of vehicular technology, the use of which may pose safety hazards for drivers and others in the vicinity of preoccupied drivers. The question then begs: where… [END OF PREVIEW]

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Individual Automobile Safety Technology Engineering.  (2012, November 12).  Retrieved March 19, 2019, from https://www.essaytown.com/subjects/paper/individual-automobile-safety-technology/6920734

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"Individual Automobile Safety Technology Engineering."  Essaytown.com.  November 12, 2012.  Accessed March 19, 2019.