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Why are car manufactures so stingy with safety?

Car manufacturers are large operations. They build millions of vehicles every year, and with the average vehicle’s price now north of $30,000 per unit, that adds up to a significant sum of money.

So, a headline that notes Chrysler is “grudgingly” adding vehicles to the recall is both unsurprising and puzzling. It is unsurprising, because a large-scale recall is more expensive to the company. They are adding more than 200,000 vehicles to their previous recall of cars built with the sometimes-defective Takata air bags that have killed 4 motorists and injured 46 when they explode during car accidents and spray the passenger compartment of vehicles with metal shrapnel.

If it cost $500 per vehicle to replace an airbag, the additional recall of 200,000 vehicles would cost $100 million. This is a large amount of money, but one must consider it in light of how much money a company like Chrysler earns. Chrysler, which is smaller than GM, Toyota, or Ford, still expects to earn about $72 billion in 2013. Their profit was $1.8 billion.

Yet, if they had aggressively dealt with the airbag issue when it first occurred, they could have saved substantial sums, as they could have stopped the installation of the defective airbags and limited their exposure to potential injuries from the defective units.

And this is the puzzling part. Why do car companies drag their feet when it comes to safety? After all, if there is a defect, it is not as if they can keep it secret. Their customers will be the first to know when defective products are sold, and if a family member dies or they are left with lifetime injuries, they are unlikely to ever purchase another vehicle from that builder.

Money.cnn.com, “Chrysler grudgingly expands airbag recall,” Chris Isidore, December 12, 2014

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