GM recalls 778K cars to replace ignition switches after fatal crashes

The following is an excerpt from an article in The Detroit News which quotes Management Professor Kaitlin Wowak about the General Motors recall. To read the entire story visit: GM recalls 778K cars to replace ignition switches after fatal crashes

General Motors Co.’s recall Thursday of more than 778,000 older Chevrolets and Pontiacs that came after six people died in crashes isn’t expected to have a negative impact on GM in the long-term, analysts said.

The company said it knows of five front-impact crashes in which six people died and air bags did not deploy in vehicles. GM said affected vehicles’ ignition switches can turn off in a crash. That causes the engine to shut down, and as a result, air bags fail to activate.

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University of Notre Dame Assistant Professor of Management Kaitlin Wowak said the recall will cost GM time and money and could hurt the company’s results. “GM is also going to have to work on repairing the brand damage it will experience as a result of this recall,” he said in a statement. “GM will be dealing with the repercussions for an extended period of time.”

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