What Lessons Will Be Learned By The Zafira Debacle?

Friday, 12. August 2016

In the current Health and Safety obsession by the EU and lawmakers in all civilised countries I find this next piece very hard to believe can still happen, especially in the UK. If you are a recent reader of my musings you may not have read the piece I put out regarding the sort of health and safety attitude that existed in the US in the 1970’s.

Briefly, Ford had a car called the Pinto which happened to be the biggest selling ‘sub compact’ car in the US at the time. Unfortunately the design of the car was unsafe, they had placed the fuel tank in such a position that if the car was hit from behind the tank exploded.

More than 500 people died as a result of the Pinto bursting into flames when they were either driving or were a passenger in the car. Many more received severe burn injuries. When a burn victim sued Ford for the faulty design it was uncovered that Ford engineers had known about the problem for many years. But Ford management had carried out a cost – benefit analysis and concluded that it wasn’t worth the $11 per car to fix the problem by recalling all of the cars compared to the cost of recompense payable to the victims.

They believed that if the problem remained unfixed they would face claims from 180 burn victims and the families of 180 victims killed. They placed a monetary value of $67,000 on a burn victim and $200,000 on a death. They added to these costs the cost of replacing the cars. They concluded that if they fixed the problem it would save them $49.5 million in compensation and car replacement costs but the cost of repairing the 12.5 million cars affected would set them back $137.5 million.

So they concluded that the cost of paying out for losses and injuries was a better option than paying out for the cars to be repaired. This of course raised a number of issues that the US Government jumped on and Ford ended up with huge costs and penalties to pay. One would assume that this couldn’t possibly happen again in this day and age with a higher moral obligation placed on companies along with massive legal consequences.

But then I read about the recent problems experienced by Vauxhall Zafira owners. I had seen several YouTube videos of Zafiras catching light and cars being pretty much instantly destroyed. For ages Vauxhall denied the existence of a problem but after 300 Zafiras caught fire they were forced to take a more responsible approach. The problem was found to be in the car’s heating and ventilation system which led to a recall of all Zafiras, known as ‘B’ models on sale between 2005 and 2014.

They originally claimed that the problem had only come to light in 2014, following which they instigated a full recall in December 2015. However, when questioned by MP’s a couple of weeks ago, Peter Hope, customer experience director at Vauxhall, admitted that they had known about the problem as long ago as 2009 when the first fire was reported. Their excuse was that when cars are completely destroyed by fire there is very little evidence left to analyse in order to establish the cause of the fire.

The good news is that unlike the Ford Pinto no-one was even injured but that isn’t the point. At what stage does a car manufacturer take responsibility and carry out a very detailed investigation when consistent things go wrong with one of their car models? The estimated cost of repairs is £33.6 million – tough! Only now, in the month of August 2016 is a further 235,000 Zafiras, as agreed with the DVLA, being recalled to have the fault fixed.

Shame on you Vauxhall for putting customers through all this when it could have been avoided. When Vauxhall denied responsibility drivers no doubt made insurance claims for their losses, paying an excess and losing no claims bonus. This simply isn’t good enough and after making the cars safe again they should prepare a plan to pay those affected compensation, something, according to Peter Hope is not at the moment being considered. What a disgrace! By Graham Hill

The EU Ensures That Stringent Safety Standards Are Met

Tuesday, 13. October 2015

Whilst I happily sit on the wall over the whole EU thing – should we be in or should we be out, there are certain things that they do that provide us with great benefits. One of these is standardisation. Safety issues sometimes require a group of people to get their heads together in order to agree a standard because clearly we can’t leave things to the individual manufacturers.

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Have I ever told you about the Ford Pinto back in the 1970’s? At the time it was the best selling compact car in the US. In fact there were 11.5 million of these cars on the road but they had a major fault. The fuel tank was mounted in the back of the car in a position where, if the car was shunted in the rear, the tank would explode. More than 500 people died as a result of the fuel tank exploding and bursting into flames with many more suffering severe burns.

This only came to light because one of the burn victims sued Ford. It then turned out that Ford engineers were fully aware of the danger posed by the fuel tank but company executives carried out a cost benefit analysis with shocking results. They decided that the benefits of fixing the problem in lives saved and injuries prevented were not worth the cost of $11 per car to fix the problem on all of the Pintos.

They calculated that if the tanks weren’t repaired there would be a further 180 deaths and 180 burn injuries. They then applied a cost of $200,000 per life and $67,000 per injury. They added to this the cost of repair and replacement of cars as a result of the tank explosions and they came up with a cost of $49.5 million but to make the cars safer at a cost of $11 per vehicle would cost $137.5 million so they chose not to repair all the cars already on the road.

When this came out in court the jury found against Ford and awarded the plaintiff $2.5 million in compensatory damages and $125 million in punitive damages (later reduced to $3.5 million). So my point is that if manufacturers were left to make their own decisions on safety I suspect that cars would be nowhere near as safe as they are now.

So on the plus side we can feel comfortable that when we get into any car across Europe we are protected by some very high standardised safety levels. God forbid we ever leave our safety in the hands of just the manufacturers. By Graham Hill