Gm Motors Essay

783 words - 4 pages

Zeeshan Shivani
Prof. Constable
Managerial Accounting
April 27th, 2014
General Motors Recall
General Motors Company is an American multinational corporation that designs vehicles and it parts. The Company was founded in 1908, it is based in Detroit, Michigan. It produces vehicle in 37 countries under brand name like Chevrolet, Buick, GMC , Cadillac ,  Alpheon, Jiefang, Baojun, and Wuling . The company also provides safety and security solutions concerning vehicles. It also provides aumotive financing services and lease products through its dealerships.
Cars produced by GM motors after 2004 had defective ignition switch due to which they had to call around 7 million cars in the first ...view middle of the document...

3 million cars. There have been two accidents that have been occurred because of this default case. There have been about 4800 complains about power steering issues and over 30000 warranty claims. The GM motors gurantee that with these safety recalls and lifetime warranties they would be able to find all the cars with these problems.
This manufacturing default case related to work in process default. The engineers knew about this default when the cars were in process of manufacturing. This default was ignored which caused about 31 crashes and 13 deaths. The second recall which was delayed by a year also had defaults that was recognized late and caused people to lost their lives and cars.Even thought it is considered as finished good default the engineers knew about it while it was in process. So when the the goods are called back its going to get deducted from finished good inventory which also reduced the gross profit. Ethics also plays a major role in this scenario, engineers should have solved the issue or should have delayed the launch of their vehicles. Ten years they knew about and now due to delay in recalling 13 people lost their lives and 31 crashes. The CEO said that they do not care about the money that is being used to solve this situation the only thing...

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