A Problem of Corporate Convenience: A Case Study of the GM Ignition Switch Recall by Ryan R. MacNeil A thesis submitted to the Department of Sociology in conformity with the requirements for the degree of Master of Arts Queen’s University Kingston, Ontario, Canada Final Submission September, 2015 Copyright © Ryan R. MacNeil, 2015 Abstract In light of the overwhelming harm caused by General Motors and its failure to recall defective vehicles for nearly a decade, this thesis explores the GM ignition switch recall and the numerous errors and omissions that enabled it to occur. This thesis begins by introducing corporate criminological studies broadly, then, in the second chapter, moves to develop a history of automobile regulation specifically. Following that, in the third chapter, this thesis builds the case against GM, showcasing how at several junctures GM chose profits over safety, and how the state regulatory system permitted this to happen by allowing the corporation to define a critical safety defect as a “customer convenience problem.” Finally, in chapter four, this thesis examines the state’s response to GM’s malfeasance, situating this in its broader social context, and then moves to criticize compliance and punishment oriented regulation from Ruth Morris’s (2000) conception of transformative justice. To effectively respond to corporate crime, this thesis argues that state responses should attempt to transform the criminogenic aspects of capitalism and the corporation, rather than punish or persuade. ii Acknowledgements First and foremost I must recognize the victims of the GM ignition switch recall. By completing this thesis I have benefitted from the pain and suffering brought to you and your families, and I hope that this thesis can help illuminate the immense harm that was caused by General Motors in their pursuit of profits. I would like to thank Dr. Jaqueline Davies for chairing my defence, and Drs. Fiona Kay and Margaret Little for their insightful questions. I would especially like to recognize Dr. Laureen Snider for agreeing to supervise this thesis. I came to Queen’s to further understand the complexities and intricacies of corporate crime, society and the law, and I am truly thankful to have been able to learn from one of the most insightful and interesting researchers in the area of corporate crime. Laureen, despite being retired, you took me under your wing, questioned my assumptions, honed my writing skills and helped me through this process – for that I cannot thank you enough. I had to rewrite entire chapters, specific pages and paragraphs during this process and I appreciate the patience, kindness and grace you showed to me throughout. Laureen, I must also thank you, and Dr. Rob Beamish for acting as references for my law school application – without your support I would not be able to move on into law school. I would also like to thank Dr. Steven Bittle who introduced me to corporate crime and even acted as a reference for my application to Queen’s. When I was completing my undergrad at the University of Ottawa I had the pleasure of taking Dr. Bittle’s course on corporate and white collar crime, and it was through this course that I became interested in corporate crime and discovered Laureen’s work. I would also be remised if I did not extend a special thanks to all the amazing people at Queen’s who I have been able to meet throughout my graduate studies. To Drs. Rob Beamish, iii Catherine Krull, Susanne Soederberg, Sarita Srivastava, and again Laureen Snider, your courses were informative, challenging, and intellectually stimulating, and I am thankful for having the opportunity to learn from all of you. To Dr. Rob Beamish and Christina Salavantis, I greatly appreciated my time spent working with you as a teaching assistant for SOCY 122. To the rest of the sociology department staff, I would like to thank you for the kindness you have shown me over the last two years, and specifically, Michelle Ellis. Michelle, I cannot thank you enough for helping prepare and send my law school application (on time!), and all the other help and guidance you provided to me as the Graduate Program Assistant. To the incredible and diverse cohort of graduate students I was able to enter Queen’s with, you made my studies at Queen’s fun and interesting, and I will look back at my time spent here with a smile on my face. I would also like to acknowledge and thank the Department of Sociology for their generous financial support throughout my studies. An extra-special thank you is also needed for my friends, family, and partner Samantha’s family who have supported me, not only through the completion of my thesis, but my entire academic career. To my mother (Giselle), father (Ron), and grandmother (read as nanny – June), from a young age (probably grade five or so) you peaked my interest in political issues, engaging me in political debate, and explaining the basics of Canada’s parliamentary democracy. This thesis is a reflection of that interest in social and political issues that you helped create, and for that I am grateful. To all my friends from Gananoque, you guys were always there to lend your support and, when necessary, provided some much needed laughs to distract me from my studies. Last, but certainly not least, for my fiancée Samantha words cannot express the gratitude I owe you. You were there for me through all the highs and lows that accompany life and the iv completion of a thesis with love and kindness, and I would not have been able to complete this thesis without your unwavering support (and creation of daily timetables and by-when dates!). I can become quite self-conscious about my ideas, and your constant encouragement, insights, and sympathetic ear gave me the confidence to write this thesis; thank you Samantha. v Abbreviations BCM Body Control Module CPIT Current Production Improvement Team DLIS Discrete Logic Ignition Switch DRE Design Release Engineer FPA Field Performance Assessment FTC Federal Trade Commission GM General Motors GSA General Services Administration MCC Mondragon Co-operative Corporation NAFTA North American Free Trade Agreement NHTSA National Highway Traffic Safety Administration NSC National Safety Council ODI Office of Defects Investigations OECD Organization for Economic Development and Co-operation P&L Panhard and Levassor Automobile Company PI Products Investigations PRTS Problem Resolution Tracking System SAE Society of American Engineers SDM Sensing and Diagnostic Module TREAD Act Transportation and Recall Enhancement, Accountability and Documentation Act TSB Technical Service Board vi Table of Contents CHAPTER 1: INTRODUCTION .........................................................................................................1 Case Study Method and Corporate Crime ................................................................................4 Understanding Crime and Corporate Crime .............................................................................7 Regulating Corporate Crime ...................................................................................................11 The Two Schools of Regulation: Punishment and Compliance .............................................13 Outline of Chapters .................................................................................................................16 CHAPTER 2: HOW DID WE GET HERE? A HISTORY OF AUTOMOBILE PRODUCTION AND REGULATION ...............................................................................................................................18 From the Duryea to the Ford Family (1893-1927) .................................................................20 Style, Science, and the Emergence of Automobile Regulation (1927-1966) .........................28 Rulemaking to Recalls (1966- 2000) ......................................................................................45 TREAD Act and the Contemporary Regulatory Landscape (2000-Present) ..........................47 Conclusion ..............................................................................................................................51 CHAPTER 3: WHERE ARE WE NOW? BUILDING THE CASE AGAINST GENERAL MOTORS ............54 A Brief History of General Motors ........................................................................................54 The Issues With the Ignition Switch and Airbag Technology ...............................................57 The Development of the Ignition Switch ...............................................................................60 Problems in Production ..........................................................................................................63 Deaths, Litigation, and the Slow Investigation into the Root Cause ......................................65 Fixing Blame and Assigning Responsibility ..........................................................................69 Conclusion ..............................................................................................................................76 CHAPTER 4: WHERE DO WE GO FROM HERE? COMPLIANCE, PUNISHMENT, AND TRANSFORMATION ......................................................................................................................78 General Characteristics of the Enforcement Process ..............................................................79 Neoliberalism and the Corporate Counterrevolution .............................................................84 Consensual/Pluralist Regulation