Voluntary Auto Recalls

Posted on August 27, 2010 07:51 by Jeff Curran

It seems to me that the auto manufacturers have decided the overall cost is simply lower when the recall is voluntary than when the alleged problem comes down to a forced recall.  By "cost", I'm not talking about simply the cost of recalling the cars, which of course is not insignificant.  I just think the overall bottom line is simply helped when it is done voluntarily.  It looks better all the way around - to consumers who see what looks like a proactive company (and thus may become repeat customers), and even ultimately to jurors who see the same thing should it get that far.  It tends to soften the company's image a bit in my estimation - to humanize the image of the "faceless corporation".   I'm sure they also save on attorney fees and the costs of fighting the recalls.  Ultimately companies (especially those that are publicly-traded entities) have to focus on the bottom line, and what's good for the company.  Here, it just sounds like the general consensus is that this path helps the company more.  Plus they get more control over the voluntary recalls (scope, time, etc.), so there's that element as well. 
 
I'm not saying there isn't any degree of altruism involved, because I know these companies are made up of people who do care.  I'm just saying that this brand of altruism happens to coincide with what is judged as best for the bottom line.  Maybe it's just the modern brand of capitalism?

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Categories: Corporate America

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