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GM Repeatedly Missed Opportunty in Ignition Switch Crisis

By not answering the door to opportunity, General Motors has managed to completely destroy their public image and counteract any growth they may have experienced over the past few years, all because they thought that a 57-cent part wasn't worth a recall.
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ASSOCIATED PRESS
This April 1, 2014 photo shows the ignition switch of a 2005 Chevrolet Cobalt in Alexandria, Va. A federal judge in Texas on Thursday, April 17, 2014 denied an emergency motion that would have forced General Motors to tell owners of 2 million recalled cars to stop driving their vehicles until their ignition switches are repaired. (AP Photo/Molly Riley)

Opportunity knocks for companies all the time. Companies need to be diligent at looking for opportunities. Crisis is often an opportunity. It knocks, sometimes loudly.

By not answering the door to opportunity, General Motors has managed to completely destroy their public image, counteract any growth they may have experienced over the past few years, all because they thought that a 57-cent part wasn't worth a recall. They defined the future of GM by ignoring the crisis that could have easily become opportunity.

They could have easily fixed this 57-cent part years ago -- long before it cost 100 people their lives .

Apparently they have known about this problem since the Saturn Ion in 2001 followed by the Chevy Cobalt in 2004. In 2003, they started receiving complaints about it.

Knock knock.

GM did open an engineering inquiry in 2004 and even identified a fix in 2005. They decided not to fix it and the inquiry was closed. That knock went unanswered.

In 2006, GM approved a change to the ignition switch but discovered years later the part number wasn't changed.

Knock knock.

Still that knock went unanswered.

In 2014, GM decided to finally recall Cobalt and G5 models from 2005 to 2007, which later expanded to include the 2003-2007 Ion, 2006-2007 HHR and Pontiac Solstice, and the 2007 Saturn Sky. The original recall was for 1.6 million cars. A month later the recall increased for a total of 2.2 million cars.

What else did they do to answer the knock and potential opportunity? They placed two engineers on paid leave.

They had the opportunity to go to the public and say, "Since we value the lives of every single person that rides in a GM Vehicle, we are going to recall every single car that has the ignition switch problem. Not only are we going to fix your car free of charge, we are going to make sure that it is done quickly and efficiently."

They didn't answer the door to opportunity and at this point there have been 100 deaths, 284 injuries, with more claims that have haven't been investigated yet. At the moment there are 4342 applications to the GM Ignition Compensation Fund. GM estimates the recall campaign is going to cost the company $1.3 billion. They still haven't fixed all the cars on the road with this problem. And their image? Worth less than 57 cents.

By just taking responsibility, by putting the needs of the customer front and center (instead of trying to figure out whose fault it was), they would have actually earned the respect of the public. They may have contributed to the perception that GM really is concerned with our safety and likely would have sold more cars as a result.

Instead, they are selling fewer cars. They are giving the appearance of not caring about the safety of their customers. All for a 57-cent part.

Opportunity knocks every single day and sometimes it disguises itself as a crisis. Are you positioned to answer the knock?

MORE ON HUFFPOST:

10 Cars No Americans Want To Buy Anymore
10. Cadillac ATS(01 of10)
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> Days in inventory: 138.1> 2014 unit sales: 29,890> MSRP: $33,215A Cadillac ATS spent an average of about 138 days on dealers’ lots before it was sold, the 10th longest time of all other car models last year. Cadillac sold nearly 30,000 units of the luxury sedan in 2014, nearly 20% of all Cadillac’s annual unit sales. Because ATS represents a large portion of the maker’s business and floundering sales, GM laid off workers at its ATS factory in Lansing, Michigan. The ATS is one of three Cadillac models with the longest days to turn. The carmaker released the ATS in 2012 to compete with small luxury brands such as the BMW 3 series. (credit:Jordan Strauss/Invision/AP)
9. Kia Cadenza(02 of10)
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> Days in inventory: 138.8> 2014 unit sales: 9,267> MSRP: $35,100The Cadenza was reviewed favorably among large sedans by Consumer Reports magazine in 2013. Despite the favorable review, a Cadenza, like other slow-selling car models, spent well more than four months on dealers’ lots before it was sold. The Cadenza is not especially popular among Americans, but neither are most large sedans. As consumer preferences have shifted towards mid-sized and entry level luxury brands, large vehicle segments are doing considerably worse this decade than they did in the previous one, according to KBB’s Fleming. Cadenza sales made up less than 2% of Kia’s overall unit sales last year. Despite poor turnover rates for the Cadenza, overall Kia sales grew by more than 7% over that period, even while sales of many automakers declined from the first half of 2013 through the first half of 2014. (credit:ASSOCIATED PRESS)
8. Volvo XC90(03 of10)
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> Days in inventory: 139.5> 2014 unit sales: 3,952> MSRP: $48,900The XC90 is Volvo’s take on the mid-sized luxury SUV. While the car is generally well reviewed and affordably priced relative to its competitors, it did not move in 2014. Volvo sold just 3,952 such units in the United States, with the average car sitting on the lot for almost 140 days. Volvo updated the first generation of this car last year, with the next generation model being introduced this year. It is likely that the slow sales are attributable in part to customers waiting for the next generation. (credit:GEOFF ROBINS via Getty Images)
7. FIAT 500L(04 of10)
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> Days in inventory: 140.1> 2014 unit sales: 12,413> MSRP: $19,195Fiat Chrysler (NASDAQ: FCAU) sold 12,413 500L models in 2014, a sizable 30% of its total unit sales that year. The 500L was not especially popular, spending an average of nearly five months on the lot before it was sold. The Fiat 500L is one of the best-selling cars in Europe, but it has not caught on nearly as well in the U.S. market. Fiat’s unit sales increased 15.5% from the middle of 2013 through the middle of last year, one of the larger growth rates reviewed. While the 500L is relatively inexpensive with an MSRP of less than $20,000, quality concerns may partly explain the car’s especially long days to turn. In J.D. Power’s Vehicle Dependability Study, more than 200 problems or complaints were reported per 100 Fiat vehicles, the highest number compared with other carmakers reviewed. In addition, the 500L is larger than a compact car but not quite a utility vehicle. Fleming observed the position of the model between traditional segments may also have hurt its chances at the dealership. (credit:ASSOCIATED PRESS)
6. Cadillac XTS(05 of10)
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> Days in inventory: 144.6> 2014 unit sales: 24,335> MSRP: $44,660Cadillac’s CT6 was unveiled at this year’s New York Auto Show. The large sedan is meant to eventually replace the XTS, which is now scheduled to be discontinued in 2019. Because the two cars are similar, consumers who would have purchased an XTS last year may have opted to wait for the arrival of the CT6. While Cadillac sold 24,335 XTS models last year — a significant portion of its total U.S. unit sales — the model spent nearly five months on the lot before it was sold. Cadillac’s parent GM still dominates the U.S. auto market with a 16.2% market share as of March. However, with floundering Cadillac sales and slow-selling models are weighing on the manufacturer’s ability to maintain its leading position. (credit:ASSOCIATED PRESS)
5. Buick Verano(06 of10)
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> Days in inventory: 144.7> 2014 unit sales: 43,743> MSRP: $23,380Introduced in 2012, the Buick Verano’s design is based on the less expensive Chevy Cruz. Like several cars spending the most time on dealers’ lots, the Verano is a more expensive entry-level compact luxury sedan. While slow-selling models tend to have relatively low unit sales, Buick sold 43,743 Veranos in 2014, more than any other slow-selling model. According to Fleming, Verano’s high number of days to turn may be acceptable for Buick, as the automaker posted substantial profits from Verano sales. Like Cadillac, the Buick brand is operated by GM, which dominates the U.S. auto market. But while Cadillac’s U.S. market share decreased slightly last year, Buick’s increased. (credit:ASSOCIATED PRESS)
4. Infiniti Q60(07 of10)
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> Days in inventory: 158.3> 2014 unit sales: 7,740> MSRP: $40,950The Q60 is Infiniti’s mid-sized luxury coupe. It competes in a tough space, with stiff competition from BMW, Mercedes, and Lexus. Infiniti appears to have overestimated its ability to compete in the space. In 2014, Q60s spent an average of 158.3 days on dealers’ lots before being sold. This implies that despite decent sales numbers of 7,740, Infiniti made more of these cars than the American people were interested in buying. This is not that surprising given that the car is priced similar to more highly rated comparable cars. (credit:GEOFF ROBINS via Getty Images)
3. Cadillac ELR(08 of10)
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> Days in inventory: 158.6> 2014 unit sales: 1,310> MSRP: $75,000The ELR is Cadillac’s first foray into the electric car space. These cars spent an average of 158.6 days on the lot prior to being sold. The main problem of the ELR is its competition — the comparably priced Tesla model S, which apart from being far better reviewed than the ELR is also far more recognizable by most Americans in the electric car market. Beyond issues of tough competition, sales of Cadillac’s electric car likely also suffered from the large decline in gas prices in 2014. The good news is that Cadillac did not bet the farm on this car. The 3,952 ELR units sold in 2014 represented less than 1% of total Cadillac unit sales. (credit:John Shearer/Invision/AP)
2. Nissan GT-R(09 of10)
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> Days in inventory: 169.9> 2014 unit sales: 1,436> MSRP: $101,770According to Nissan, the GT-R is the fastest car produced in high volume worldwide. Less than 1,500 of these supercars were sold in 2014, and it took nearly six months to sell a GT-R, longer than all cars but the Honda Insight. The slow selling GT-R model is not likely a major concern for Nissan, however, as the car is intentionally exclusive as the pinnacle of the manufacturer’s portfolio. The price point of the GT-R of around $100,000 is exceptionally high even among luxury vehicles. In March, Nissan North America’s car business had a 5.4% U.S. market share, down from the same time in 2014, when the company had a U.S. market share of 6.2%. (credit:ASSOCIATED PRESS)
1. Honda Insight(10 of10)
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> Days in inventory: 170.7> 2014 unit sales: 3,965> MSRP: $18,725No car model spent more time on the lot than the Honda Insight, which in 2014 took about 171 days to sell on average. By contrast, the industry-wide average is about 71 days to turn. In addition, less than 4,000 Insights were sold in 2014. Like several other slow-selling vehicles, the Insight is marketed as a fuel-efficient car. With gas prices falling dramatically across the nation last year, however, electric cars and hybrids such as the Insight have become less popular. Honda announced it would discontinue the car due to slow sales. The poor performance is by no means a boon for Honda (NYSE: HMC). Despite poor performance, Insight sales accounted for a relatively small portion of the makers overall unit sales — less than 1% — which means the Insight’s failure to attract consumer interest won’t be especially damaging to the company’s overall profitability. (credit:ASSOCIATED PRESS)
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