Right time for a recall

Nissan CEO, Carlos Ghosn

Nissan announced a recall for about 540,000 of their vehicles on Wednesday for two separate problems with their cars that have not caused any injuries or deaths. This comes only one day after GM issued a recall (see yesterday’s post for more details on it) for 1.3 million of its cars. Don’t you find it interesting how these things seem to come in bunches? Well it is interesting, but not a coincidence.

Both GM and Nissan knew that they would have to issue these recalls at some point and since no deaths or many injuries occurred from these issues, they were waiting for the right time. GM saw that Tuesday would be a good day because it was the same day that Toyota was set to release its much anticipated monthly sales figures (the first full month after the brake pedal scandal). They knew that not only would that dominate the news, it would also remind people of the seriousness of the Toyota problems and that would make GM’s recall seem futile in comparison.

A day after the GM recall was announced, Nissan saw an opportunity to issue their recall and reduce the chance of dominating the news headlines as well thanks to Toyota and to a lesser extent, GM. This was a good strategy for both GM and Nissan as more people talked about the Toyota sales figures and surging Ford sales numbers. The only question that no one seems to be asking is: Do these companies not have an obligation to issue recalls as soon as they are made aware of the problem to avoid putting people in danger?

The answer may seem simple but in fact, it is not that cut and dry. Yes, by issuing these recalls ASAP they can potentially put less people at risk, however, these risks are very small and no one has been killed or seriously injured. Also, by announcing a recall right away and not making sure the timing is right, it puts the brand/company at a greater risk for lower sales. This puts people and more specifically their employees at a risk of losing their jobs. Now the question is: Would you rather be at a small risk to sustain a minor injury or be at an increased risk of losing your job? The answer to that question is not easy at all to arrive at.

These companies surely made many calculations to project how many injuries can or will be sustained by waiting and to what degree the injuries would be. If they saw that the injuries would be severe or great in numbers, then I am certain they would not wait because they would likely never find the right timing for an announcement involving multiple deaths or serious injuries or a high volume of minor injuries. Therefore, if there was a more than not so small chance of minor injury or a tiny chance of death, they would issue that recall very quickly.

Like it or not, this is a part of doing business. A business executive does have to put safety first, but the security of the employees has to be very close behind in priority. It does not make the CEOs of GM or Nissan evil or bad for waiting a little on these recalls because they did their due diligence to make sure that no one will be seriously injured and they also put their employees and other beneficiaries at the best chance to maintain their job/financial security.