As a former GM employee and a GM customer, I’m really fascinated by the reaction of the public, the media, and Congress to the recalls and scandal over ignition switch problems in some GM small cars from recent years.
This leads to a great public outcry. As happened with Toyota, the CEO gets called on the carpet to explain themselves and the company to Congress (with lots of politician showboating taking place). It’s good to examine what happened, to see what companies, regulators, and the public can learn to prevent future problems. Or, it might just be unhelpful political theater.
There are anywhere from 44,000 to 400,000 preventable deaths a year in the U.S. as a result of medical errors and systemic problems in healthcare. Not that it necessarily helps, but why aren’t hospital and health system CEOs testifying in front of Congress each day? Why is this not regular front page news? Are people more concerned about vehicle safety than healthcare safety? Which is a bigger risk?
Some of her comments are very interesting, from the WSJ article, as she blamed “the old GM culture” (of which she has been a part since 1981, although she is the new CEO):
Ms. Barra called the decision “not acceptable” as family members of some of the 13 people killed in accidents blamed on the switches looked on. “In the past,” she told them, “we had more of a cost culture, and now we have a customer culture that focuses on safety and quality.”
This is a pretty blunt assessment and admission of the “old culture.” Can it really change to a “new culture” as quickly as signing bankruptcy documents for the “old GM?”
When I worked for GM from 1995-1997, it was certainly a “cost culture” in the factory. More of a “quantity first” culture where making daily production numbers was far more important than quality and employee safety. That’s my blunt assessment of that environment and I’ll probably share a long story about one experience in Friday’s blog post.
The discussion reminiscent of a famous scene in the movie “Fight Club” in which Edward Norton Jr.’s character coldly explains the thought process at an automaker. Which one did he work for? “A major one.”
Narrator: 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.
Business woman on plane: Are there a lot of these kinds of accidents?
Narrator: You wouldn’t believe.
Business woman on plane: Which car company do you work for?
Narrator: A major one.
What did Barra admit to GM deciding?
“GM managers ruled out redesigning a flawed ignition switch because the fix would cost 90 cents a car, and return only 10 cents to 15 cents in warranty-cost savings.”
Yikes. That’s a slightly different equation than Fight Club, but it’s the same cold logic. “On average,” the company comes out ahead but some particular customers might be hurt or killed. Yikes.
And Barra said:
But Ms. Barra repeated assurances that “today’s General Motors” is putting safety first, and fixing its internal lines of communication to assure that customer complaints and evidence of safety problems get acted on more quickly.
Again, does a huge company’s culture change overnight? Has it really changed? Is it as easy as yesterday and today? Probably not.
There’s an interesting aside about the unintended consequences of well-intended government regulations, as described in this USA Today piece.
One reason for the lapse is GM’s disarray at the time. But another is that the 2000 Transportation Recall Enhancement, Accountability and Documentation Act created a perverse incentive for automakers to refrain from fully airing safety concerns internally — the exact opposite of its purpose. Once the matter reaches company higher-ups, NHTSA has to be informed within five days, inviting intrusive investigations. Hence, there was an unwritten code that evidence not be moved up the chain of command until necessary.
Oops! One can fault the law, but I think the burden really has to fall on GM for not doing the right thing.
Are most of “today’s hospitals” like the “old GM?”
Barra’s statements sadly remind me of today’s hospitals talking about now putting patient safety first. Many hospitals, as part of their Lean healthcare initiatives, are thankfully improving “internal lines of communication,” such as Virginia Mason Medical Center and their “patient safety alert” system that’s being adopted, recently, in Saskatchewan.
“On average,” patients are safe, but far too many are being hurt and killed by preventable systemic errors (things we don’t leap to blame individuals for). You’re not guaranteed to get hurt, but, then again, you’re not guaranteed that a GM small car covered by the recall will always shut itself off while you’re driving.
One other way Barra described GM reminds me of hospitals and health systems.
[GM’s] disclosures and depositions leading to the recall suggest a cultural landscape during the prior decade where employees worked in silos, isolated from other departments and critical information.
We can sit back and snicker at GM, but are hospitals doing any better?
Does your hospital focus more on costs instead of quality and patient safety? Are there isolated silos that aren’t sharing critical information that would help or protect patients? Are there times when we are “penny wise and pound foolish,” in terms of saving a little money today in a way that might harm our patients down the road? What is your honest assessment of that?
Short of lambasting hospital CEOs in front of Congress, what can we do to change the “old hospitals” into “new hospitals” with a better culture and better outcomes?
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