"Take the nubmer of vehicles in the field, A, multiply by the probabilty rate of failure, B, multiply by the average ouf-of-court settlement, C. A x B x C = X. If X is less than the cost of a recall, we don't do one."
In all honesty, how would you recommend doing cost benefit analysis for a car manufacturer? There will always be safety risks to the drivers, after all.
Yes, perhaps the law should be more strict , but in any case there is a value -- there is a number which sometime you'll have to assign even implicitly to a customer's life.
But consider the possibility that the law had a loophole (or the law is simply inadequate in light of common expectations from the population) which brought the maximum litigation from crashes to a very low number. Although this simplistic view would suggest a very low cost, that would be unrealistic -- the actual cost should include heavy brand damage from consumer distrust in the products and even brand damage from raw ideological/moral basis. This is way promoting values inside companies makes sense -- you can't neglect humans have personal values and sometimes make non-economic choices to stay aligned with those -- so you have to adjust your "psychopath" economics towards consumer irrationality. In the end I suspect the optimal choice is much closer to Tesla's reaction than GM's.
A similar equation is fine, but 'average settlement' is probably too low. Add 10 million to C before multiplying and you have a better balance, with a margin of error on the side of safety.
Corporate American style. You want to guess the number of times an airplane design defect that threatens the life of passengers is allowed to be corrected "over time" -- basically because fixing them ASAP would be too expensive?
At the airplane industry it's the government that does this calculation, with a publicly known value of C. Also, airplanes don't have the kind of problem that cause an accident by itself, every issue can be corrected on several levels, and normally when the proper fix isn't instantly applied some other action is done to attenuate the problem.
On any advanced country, around here it calculates nothing, even yelling "Are you insane? Do you know how many hospitals we could build with that kind of money?" won't make they think about numbers.
Isn't it true that every car manufacturer will be aware of some level of risk and will have to make decisions based on that? There's always more you can put in a car to make it safer, but at some point you stop and release the car.
Note that I'm not saying this particular case is justified. I'm just saying that it's a continuum, and I'm not sure how we should expect car manufacturers to draw the line on the continuum.
Certainly. Knowing that a car may lose control if it runs over the alternator that fell off another car at highway speeds (as shown in the Tesla video) is one thing. Knowing the car can randomly shut off including airbags at highway speeds is another.
If you sell more cars, you should be able to invest more in engineering reliability. The cost should be spread out over many more vehicles. This all goes out the window depending on margins, priorities, and presumably other factors, but for the sake of argument: I'd say both numbers on their own aren't fair.
And lets not forget how astonishing that is in light of what many other car manufacturers[0] do when they find issues that effect millions of their cars in a much more dangerous way. The fact that even with that issue, their safety numbers are through the roof and their number of incidents are way under the national average, and they still willingly and transparently issues a recall, I count that as nothing but a plus for Tesla.
Compared to GM that waited recently until 13 people had died before issuing a recall for faulty ignitions? Or how about the 119 deaths from knowingly underinflated tires on Ford Explorers back in 2000? Car companies are reactive and calculating, Tesla is proactive with foresight.
I did, and I'm not sure what you are trying to say exactly, but the point I was making which others have pointed out as well is that Tesla issued changes not for an issue with their car, but to improve it and make it better. Other car manufacturers waited until there were either deaths, lawsuits, or media outcry to recall cars. They were all reactive purely based on cost-benefit. Tesla decided here that their already incredibly safe cars that have fared better than most, if not all others; could be made even better. What Tesla did is leagues above what any other manufacturer has done in recent memory.
Come on dude, you make it sound like these things we're catching on fire all over the place - "... the number of incidents remains small, and Tesla’s review to date points to the building receptacle or wiring as the primary cause of failed NEMA 14-50 adapters, the company has determined that a voluntary recall is appropriate as a precautionary measure.”
(this has apparently resulted in a number of deaths, as the power steering stops working)