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How do car companies see lawsuits?

  

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Of all the car companies that are out there today, each manufacturer has gone through at least one lawsuit because of a bad design/poor quality.

That being said, do car companies really look at these lawsuits as a big issue? If they felt that this is a big issue, they would be looking to improve their brand image and we aren't seeing any better quality from any manufacturer.


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6 Answers
5

They probably see it as the cost of doing business and cheaper than building a better product. One of the most infamous examples of this was the Ford Pinto, where the company knew that due to defective design the car was prone to burst into flames when hit from behind. However they calculated that paying off the resulting lawsuits would be cheaper than fixing the problem.


Did the later Chevy Caprice/Buick Roadmaster and Cadillac Fleetwood have a lawsuit similar since the gas tank is right behind the bumper?


It wasn't the location of the gas tank per se, a lot of American cars had them back there for a long time. The problem on the Pinto was that bolts on the differential were located such that they would pierce the tank in a rear collision.


4

Automobile manufacturers have office buildings full of attorneys whose only job is to squash you like a bug.  The cost of this legal mumbo jumbo is built into the price of the car you just bought.  They will do anything to avoid responsibility.


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The cost of lawsuits vs. the cost of building reliable, long-lasting cars (but losing $$$ from sales):  when they do the final analysis, it appears they were willing to deal with lawsuits (as the cost of doing business) because in the end it may cost that much more to build a better car.

Plus to stay competitive and keep the shareholders happy will result in a vehicle that will have some issues, and invariably lead to lawsuits because no one is ever happy and lawyers like to go after the class action lawsuits for the big bucks.

I don’t think the automakers can ever win.  Make the products very reliable and costs go up and consumer complains “why so expensive?”  And the lawsuits would still keep on coming.


2

I think you're asking "how seriously do auto makers take lawsuits"? But I think it needs more context or examples. Like anybody can sue for any trivial thing. Some lawsuits are bigger than others (VW dieselgate). Some lead to government investigations. Some lead to recalls etc. Some are totally bogus and get thrown out. Some are launched by individuals, some by groups (class action), and some by government prosecutors. So it depends a lot on the particulars.

You asked "do car companies really look at these lawsuits as a big issue". Well sometimes I don't think they really have a choice. They may forced to pay huge fines or issue massive recalls. It becomes a big issue whether they like it or not. Either way it costs them A LOT of money. And I don't know of ANY large successful businesses (or their shareholders) who DON'T consider millions of dollars a big issue. Of course they will try to avoid it. And of course it's bad for public image as well. But BEFORE things even get to court, a company has decide how to handle issues that come up, and usually it's better for them to settle things privately. It all comes down to cost. Recalls are extremely costly and detrimental.

 

We've also seen companies try to downplay issues (Hyundai, GM, etc.) It probably works most of the time for smaller issues. But sometimes it backfires on them, and then they get investigated for cover-ups which lands in hot water (big fines, criminal investigates, etc.)

 

The corporate world is a fickle one. Just like politics.


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It matters if you build a quality product, but you will get sued anyway. As mentioned before, it's a cost of doing business. They have product liability insurance and plenty of lawyers. The cost of these things is factored into the price of the cars.


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They could care less. Look at how GM handled the ignition debacle, or VW with Diesel Gate. They just want an amount for the check they need to write.


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