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Takata airbag recall: cost concerns took priority over safety?

You may be dating yourself if you remember the Ford Pinto. It was an economy car produced in the early 1970s that turned out to have a serious defect: when involved in a collision in which it was struck from behind, problems with its fuel system design meant that gas tank tended to explode. What made the Pinto legendary in the annals of product liability was that it turned out that the manufacturer knew of the defect, but chose to do nothing to correct it based on a simple cost calculation: the amount of money that the company expected to pay out in personal injury and wrongful death damages connected with Pinto gas tank fires was significantly less than it believed it would cost to recall the cars and fix the problem.

Fast forward to today, and it may be that we are witnessing another developing product liability case that involves a similar cost-benefit calculation: weighing the financial burden of correcting a design defect against the anticipated costs in terms of loss of life and pain and suffering from doing nothing about the problem. 

Documents obtained in connection with a government investigation of the automobile airbag manufacturer Takata suggest that the company was aware of potentially lethal problems with its product, but initially elected to do nothing about the problem, and for about two years even stopped doing safety audits because of cost considerations. As of 2013, when the company began to recall millions of airbags, some of which must certainly have found their way into cars being driven in Texas, defects related to those products had led to allegations that at least eight people had died and about another 100 had been injured because of those defects.

Every manufacturer must adhere to balance sheets and a "bottom line" to stay in business. But when cost considerations take priority over the negative consequences that defectively designed or defectively made products can have on consumers, it may be necessary for those who have been injured or who have lost loved ones to resort to product liability lawsuits to seek recompense for such calculations.

Source: NBC News, "Takata Ended Airbag Safety Checks Due to Cost, Says Report," Michael Strong, June 23, 2015

 

 

 

http://www.nbcnews.com/business/autos/takata-ended-airbag-safety-checks-due-cost-says-report-n380386

 

http://users.wfu.edu/palmitar/Law&Valuation/Papers/1999/Leggett-pinto.html

 

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