General Motors (GM) on Thursday (Feb. 13) announced it is recalling
nearly 780,000 Chevrolet Cobalts and Pontiac G5s in North America
because the compact cars’ engines can shut down unexpectedly and cause
deadly crashes. This follows a massive global recall yesterday by Toyota
Motor Corp. of its popular Prius hybrid to fix a software glitch that
could cause the car to stall.
Kaitlin Wowak, assistant professor of management in the University of Notre Dame’s Mendoza College of Business, says both companies’ brands will suffer.
“Today’s recall by GM is going to have a significant tangible and
intangible impact on the company’s performance,” says Wowak, who
specializes in supply chain management and disruptions. “GM stopped
making the defective cars in 2007, but they are still in the
marketplace. Consequently, GM is going to spend a considerable amount of
time, money and effort locating and repairing them. The recalled cars
have caused several fatal crashes; therefore, GM has to respond quickly
for the safety of its consumers and to repair inevitable brand damage.
The fallout from this recall will last a long time.”
According to Wowak, Toyota, once known for producing high quality products, has slipped with regard to quality control.
The Prius’ software settings have been found to produce heat in the
car’s circuits, damaging parts and, in rare circumstances, shutting down
the hybrid system while the vehicle is being driven, causing it to
“The Prius recall is not only going to cost the company millions of
dollars, it will further tarnish Toyota’s brand, which the firm has been
battling to rebuild since the beginning of a string of recalls in
2009,” says Wowak, who recently won a research award for a study examining the product recall process.
Wowak’s study “Why do Some Product Recalls Succeed and Others Fail?: A
Grounded Theory Investigation of the Recall Process” earned Best
Empirical/Theoretical Paper honors last year from the Decision Sciences
Contact: Kaitlin Wowak, 574-631-6685, Katie.Wowak@nd.edu