Cases for class discussion
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This document provides an introduction to case studies on Volkswagen (VW) and General Motors (GM) regarding ethical issues in the automotive industry. It outlines an applied ethics model for analyzing the cases and discusses relevant facts about emissions scandals at VW and an ignition switch issue at GM that led to recalls of millions of vehicles. Questions are provided to guide analysis of the ethical problems and decisions made by each company.
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Cases for class discussion
- 1. Introduction to VW and GM case
- 2. Today’s Agenda • Large automotive companies and ethics. • Applying ethical principles to VW and GM. • VW Case study • GM Case study • Setting up Assignment 2 2 https://flic.kr/p/8XLzCQ
- 3. Auto industry in trouble 3
- 4. Applied Ethics Model Following the above model will allow us to decide: 1. What to do 2. Why you should do it (or not) 4 Governing or Ethical Principles Relevant facts Practical Conclusions
- 5. VW in the news • Volkswagen to recall 11 million vehicles as emissions scandal expands • Volkswagen facing 'tsunami' of legal trouble in emissions scandal • Volkswagen, Audi class action requests continue in Quebec • Volkswagen announced plans on Tuesday to refit up to 11 million vehicles and overhaul its namesake brand following the scandal over its rigging of emissions tests. • New CEO Matthias Mueller said the German carmaker would tell customers in the coming days they would need to have diesel vehicles with illegal software refitted, a move which some analysts have estimated could cost more than $8.7 billion. • VW share price dropped more than 40% over the past two weeks 5
- 6. VW extend recall due to emission scandal 6
- 7. The VW Emissions Scandal • http://sacramento.cbslocal.com/2015/09/22/university-that-found- volkswagen-emissions-problems-discovered-similar-issue-previously/ • http://www.bloomberg.com/news/articles/2015-09-22/putting-a-price-on- volkswagen-s-diesel-emission-fraud-liability • http://www.huffingtonpost.ca/2015/09/22/vw-11-million-diesel-vehicles- fitted-with-suspect-software-setting-aside-7-3-billion_n_8175598.html • http://www.reuters.com/article/2015/09/23/us-usa-volkswagen- idUSKCN0RL0II20150923 • http://www.cbc.ca/news/technology/how-emissions-tests-that-exposed- vw-scandal-were-done-1.3243461 7
- 8. • What did VW engineers do? • Why is this an ethical issue? • What were the pressures that caused them to behave in this way? • How did this break their contract with customers/dealers? • Do you think the CEO knew about it? • What will be the likely consequences for the company? 8 VW - Questions to consider in class
- 9. • It took General Motors more than 10 years to issue a recall for 2.6 million cars carrying an ignition switch now blamed for at least 124 deaths and 275 injuries. • The firm admitted in September that it failed to disclose its small-car ignition switch could turn the car off while being driven, lock the steering wheel and also fail to set off airbags in a crash. There are internal reports about the problem dating back to 2002 in the Saturn Ion, Reuters reported. • The deception cost the company more than $1 billion US — and 15 people their jobs. • The firm reached a $900-million settlement with the U.S. government to avoid criminal charges. That figure is on top of $625 million that GM set aside as compensation for those injured or killed by the flawed ignition switch. Families of those who died will get at least $1 million. 9 GM in the news
- 10. GM – the switch from hell 10
- 11. THE CASE OF THE GM IGNITION SWITCH • http://www.wxyz.com/news/local-news/investigations/gm- employees-knew-of-faulty-ignition-switches-10-years-before-issuing- recall • http://www.cbc.ca/fifth/episodes/2014-2015/gm-recall-the-switch- from-hell 11
- 12. • What caused the original problem at GM? • When did they become aware of it? • Why did they ignore the initial information? • What were the pressures that caused them to behave in this way? • How did this break their contract with customers/dealers? • Is there an ethical difference between the decisions of GM and VW? 12 GM - Questions to consider in class