Recalls and the Economics of Death

Corporate recalls and other corrective measures taken by corporations typically occur under great duress.  One need not look far to see this is so.  Banking fraud recently in the news is a perfect example.  Banking fraud  is appalling but no lives were lost.  Other corporate decisions related to consumer safety have much graver consequences.  It happens time and time again that corporations fail to take action despite knowledge of deadly threats to consumers.  Why is this?

The Wisdom of Fight Club:  Airplane Chat Scene

A new car built by my company leaves somewhere traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now, should we initiate a recall? Take the number of vehicles in the field, A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we don’t do one.

Are there a lot of these kinds of accidents?

You wouldn’t believe.

Which car company do you work for?

A major one.

Tragic Consequences of Recall Economics

The scene from Fight Club is humorous and shocking at the same time.  The humor and shock derive from the absurdity, immorality and truth of the decision-making process spelled out by Jack.  Most consumers who are paying attention are fully aware of these types of decisions with or without knowledge of corporate cost-benefit analysis.  Yet we continue to buy the products that kill us and the companies that sell them continue to see lost lives as a mere balance sheet item.  The result is countless consumer deaths in auto accidents, exploding phones and vape pens, dangerous children’s toys, unsafe car seats and baby beds and many more consumer products.  It does not stop there.  It permeates even the most sacred safe places: i.e. hospitals and medical care.

In the worst cases, even given public knowledge and outrage, corporations continue to put dangerous products out to the public.  The analysis simply shifts from the costs of “out of court settlements” referred to by Jack.  The costs-benefit analysis must now simply factor in the costs of governmental fines and penalties.  These are generally a small pittance compared to the profits of keeping the products on the market.  They hardly serve to deter the behavior.

The Corporate Costs of Dangerous Misbehavior Must be Enormous to Change Behavior

Just the last year brings plenty of examples of corporate resistance to basic morality and decency.  Take banking as an example who fought tooth and nail to maintain the fraudulently earned profits.  Still ongoing is the resistance of Wall Street to any consumer protection regulations to prevent another economic collapse.  This resistance will soon have a place in the White House.

Yet again, these were financial in nature.  There were numerous others throughout the year that came with deadly consequences and unfathomable harm to consumers and their families.  They continue and will never cease until consumers hold these companies and their purveyors accountable.  This is done through the consumer choices we make.  Unfortunately for far too many, this is not an option because they or a loved one has already suffered harm.  The only thing left to do to hold the companies accountable is through the courts with the aid of the much maligned trial lawyers that make this possible.

Why Do Corporations Hate Trial Lawyers?

This question has a simple answer:  trial lawyers succeed where government regulators fall short.  There is no question that government regulations are absolutely necessary for consumer safety.  However, the fines and penalties that are imposed are meager compared to the profits associated with their violation.  Trial lawyers are the last best chance for most people harmed by corporations to have any measure of justice.

Justice comes with a costs to corporations.  Corporations on the whole have no interest in justice.  The goal is not justice or safety to their customers, but profit.  Trial lawyers cut into that profit like government regulations rarely can.  This is why there is a constant beating of the corporate drums to discredit trial lawyers and their clients.  Sadly, most Americans due to the volume and pervasiveness buy into these lies.  They do so at the peril to themselves and their families.  It is only when these wrongs hit close to home that they learn that they have been lied to.  At that point, there is no amount of money that can compensate them for their losses.  But money is the only thing available and this is what corporations hold most dear.

Speak Up, Take Action, Protect Yourself and your Family

There are plenty of ways to make your voice heard.  Stop buying the products that kill.  Stop doing business with fraudulent banks, insurance companies, and other companies.  Contact your local, state and national political leaders to voice your concerns and then hold them accountable with your votes for failure to take action.  Don’t buy to corporate lies about frivolous lawsuits, dishonest trial lawyers and greedy plaintiffs.  These lies harm but only if you buy them.

For those who do suffer harm from corporate predators, hold them accountable in the courts.  Speak with an experienced attorney and make the truth known and the company held responsible.


Why didn’t GM fix faulty switches? A per-car cost of less than $1 – CBS News

Why didn’t GM fix faulty switches? A per-car cost of less than $1 – CBS News General Motors (GM) faces mounting criticism that it failed to repair a defective part linked to the deaths of at least 13 people because of the costs involved in making the fix.

A Cheaper Airbag, and Takata’s Road to a Deadly Crisis

A Cheaper Airbag, and Takata’s Road to a Deadly Crisis Details of G.M.’s decision-making process almost 20 years ago, which has not been reported previously, suggest that a quest for savings of just a few dollars per airbag compromised a critical safety device, resulting in passenger deaths. The findings also indicate that automakers played a far more active role in the prelude to the crisis: Rather than being the victims of Takata’s missteps, automakers pressed their suppliers to put cost before all else.

Some automakers still use riskier Takata airbags

Some automakers still use riskier Takata airbags Despite more than 28 million Takata airbag inflators being recalled in the U.S., some automakers are still using them in new cars.

 Grilled About Deadly Superbug Outbreaks, Execs At Scope Maker Olympus Take Fifth | Kaiser Health News

Grilled About Deadly Superbug Outbreaks, Execs At Scope Maker Olympus Take Fifth | Kaiser Health News At least 35 patients in American hospitals have died since 2013 after developing infections tied to tainted Olympus duodenoscopes — flexible, lighted tubes used to peer deep inside the body. More than 25 patients and families, including the Seattle-area widow, have sued Olympus for wrongful death, negligence or fraud.

In a Feb. 6, 2013 response to a question from a U.S. Olympus executive about whether American hospitals should be warned, Nishina replied it is “not need[ed] to communicate to all the users actively,” because a company assessment of the risk to patients found it to be “acceptable.”


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