The General Motors Ignition Switch Incident Viewed Through a Proposed Economic Impact Severity Index

Abstract

Management’s response to any disaster has historically been based on hindsight. Little work has been done to offer tools by which a company can examine possible decisions in light of compounding factors that can cause disasters to spiral out of control. This paper will review the General Motors (GM) Cobalt Key disaster and apply a proposed methodology for review as the disaster unfolds. Rather than hindsight, the proposed decision matrix will identify for future companies proactive decision points which are key to changing the economic outcomes of each company. GM will be examined for strategic decision errors leading to their current situation and its final outcome.