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The Biggest Scandals and Cover Ups in the Automotive Industry

Vukasin Herbez July 18, 2018

Ever since the car industry became a major part of national economies, big car companies have tried to lower production costs, raise profits and move ahead of their competition in every way. However, to do so, even the most famous names in the business had illegal or immoral methods that caused big scandals widely known in the car industry. Most people have probably heard of the latest scandal involving Volkswagen’s cheating on emissions testing the press called “Dieselgate.”

However, this is just one of many shocking scandals and cover-ups by the biggest names in the industry that has affected the car world in recent decades. And if you think such problematic behavior is limited to the recent past, think again. The wheeling and dealing have been present since the first cars rolled off the assembly lines. The rise of consumer consciousness and addition of modern technology has made sharing such wrongdoings and oversights to a larger audience quicker and easier. Also, those independent consumer control bodies have helped reveal these faulty doings faster and more often.

Here is a list of the biggest industry scandals and cover-ups in car history. It is shocking what some companies have tried to get away with over the years. It is even quite possible that a faulty component or undeveloped system has affected your car. So, read on to learn about the biggest scandals and coverups in automotive industry

1. General Motors Kills Chrysler Airflow

In 1934, the then-young Chrysler Corporation introduced a revolutionary new model they called the Airflow. It was one of the most advanced cars of its time with numerous innovative features like unibody construction and aerodynamic styling. The Airflow came with advanced safety features and a luxurious interior, too. For the mid-30s, the Airflow was the car of the future and Chrysler was happy to advertise it as such.

However, the rest of Detroit’s big automakers weren’t pleased that a small company like Chrysler introduced a model that made the other cars seem outdated and unsafe. Chevrolet was particularly angry because it looked like Chrysler would take much of its sales. But, there was no time to copy the Airflow, so Chevrolet decided to attack Chrysler with an extremely immoral smear campaign.

Chevy spent an enormous amount of money to advertise in newspapers and magazines, claiming the Airflow was a GM design that Chrysler stole. They also said that the car was terribly unsafe and dangerous. Despite Chrysler’s campaign to clear their name, the public was sold on Chevrolet’s lies and Airflow sales suffered.

In fact, Chrysler decided to discontinue the car after just three years, marking Chevrolet’s win in this marketing war. This was the first time that a major automaker used the mainstream media for its own immoral purposes.

2. Tucker Torpedo Story

Although most people know the sad story of the Tucker Torpedo, it’s worth telling it again. The greatest “what if” story in history is the saga about Preston Tucker and his brainchild he called the Torpedo. There are numerous books and movies about this maverick entrepreneur and his vision of an advanced family sedan. They talk about his quest for improvement and the conspiracy against him and his company.

Preston established the Tucker car company in the late ’40s. He soon presented a fully functioning prototype that made the rest of the cars from Detroit look terribly outdated. The Tucker Torpedo featured numerous innovations, including safety glass and a central headlight that followed the movement of the steering wheel. It also had a roomy interior and an engine in the back with lots of power and torque.

The Tucker Torpedo was so advanced that The Big Three – Chrysler, Ford, and GM – were afraid it would cripple their market share. So, while Tucker prepared for full-scale production, they prepared to set him up with a lawsuit to stop the production and sink the company. Chrysler, Ford and GM even managed to forbid Tucker to buy steel and machines for his company, stopping the construction of their early prototypes. Unfortunately, The Big Three were successful, so Tucker only built between 48 and 51 of his fantastic Torpedos.

3. Chevrolet Corvair

In the late ’50s, Chevrolet presented the Corvair. It was a revolutionary compact car with a rear-mounted, air-cooled, flat-six engine. This was a big step for Chevrolet since the Corvair featured a different concept, technology and design than other cars in their lineup. However, for a couple of years, it looked like everything was going well with the Corvair. In fact, sales were brisk until the book, Unsafe at Any Speed, hit bookstores across the country, causing big problems for GM.

The book’s author, Ralph Nader, was a consumer advocate who discovered some classified documents showing that Corvair was the reason for many car accidents, some even fatal. Apparently, the engine in the back of the car caused the Corvair to have problematic handling. Chevrolet was aware of it but didn’t want to invest money in additional stabilizer bars and suspension modifications.

Soon, the book gained lots of publicity and the public demanded answers, while more drivers reported crashes with the Corvair. Chevrolet was even involved in some government hearings, admitting its executives knew something about the matter. They ended up paying a settlement and promising to invest money in safety research. In the end, Corvair sales dropped and Chevy discontinued the model in 1969.

4. Chevrolet Engine Mount Problem

After the embarrassing Corvair case, Chevrolet was hit with bad publicity again when people discovered the cars they built from 1965 to 1969 had faulty engine mounts. In fact, they were the cause of more than 170 accidents and numerous injuries. The problem was, in some cases, the engine mounts could suddenly break. This caused severe vibrations, sudden acceleration and a loss of control of the vehicle.

In most cases, this scenario ended with a crash. Worse yet, Chevrolet apparently knew about the problem but chose to do nothing about it. When the scandal broke out, research showed Chevy had been using the same engine mounts since 1958. Publicity and public pressure made Chevrolet redesign the part, recalling some 6.7 million cars.

5. Ford Pinto

In the 1970s, domestic car manufacturers addressed the changing market climate and rising popularity of compact cars with several homegrown models. However, all of them were bad, even back then. And one of those bad cars was the Ford Pinto. Ford introduced the Pinto in the early ’70s and it soon became popular due to its low price.

Car fans thought it had a fairly nice design. It also came with a long list of options. Ford equipped the Pinto with an economical four or six-cylinder engine. Also, the overall quality was decent. So, what was the problem with the Ford Pinto?

While engineering the car, Ford somehow left out any protection for the Pinto’s rear-mounted fuel tank. The fuel tank was below the trunk and just behind the rear bumper. On most cars, there is a strong cross member that protects the fuel tank in case of a crash. However, the Pinto lacked this feature. Unfortunately, this problem became apparent when people started getting killed in fiery crashes caused by leaking fuel tanks.

Families of people killed or hurt in such incidents sued Ford. Eventually, the company spent millions settling the court cases and recalling 1.5 million cars. Some sources claim that as many as 900 people died because of Ford’s faulty gas tank design. Despite improving the design of the Pinto afterward, they soon discontinued the model, sending the Pinto into the history books as the Car of Death.

6. Ford Transmission Problem

The 1970s were marked by the Ford Pinto debacle. Ford spent millions of dollars on court cases, paying the families and trying to iron out its public image. But this wasn’t the end of problems for the Ford Motor Company. The NHTSA concluded a big three-year investigation into claims all automatic transmissions they installed in their products between 1966 and 1980 had a defect. The defect could cause the car to switch from park to reverse, putting the car into motion without the control of the driver.

The situation became even worse with the discovery that Ford knew about the problem and rejected an extremely affordable solution. Suddenly, the company was facing another enormous, expensive recall and numerous lawsuits. But they managed to make a deal with the government and pay the families of the people injured in accidents due to the faulty transmission.

Ford even printed 23 million stickers which they gave to Ford owners. Drivers had to place them on their dashboards to warn them to make sure their car was in park before turning it off. Ford managed to avoid a massive recall, which would have killed the company. However, keep reading, because they didn’t learn a lesson, as you will see later.

7. Audi 5000 Acceleration Problem

Today, Audi is one of the leading luxury brands in the American market. But in the late 1980’s, they were almost gone from U.S. shores due to rumors of unintended acceleration and numerous crashes. In 1986, the popular CBS TV news show, 60 Minutes, ran a feature about Audi’s unintended acceleration on the popular 5000 model. Viewers didn’t know someone had rigged the car.

In fact, the acceleration featured in the show wasn’t genuine. After they aired the show, the car community buzzed, damaging Audi’s reputation. Audi responded by publishing numerous tests and videos showing how the only way that could happen was if the driver’s foot slipped from the brake to the accelerator pedal. Still, it didn’t help their cause, so Audi 5000 sales hit rock bottom.

Although 60 Minutes published a false story and Audi later proved the 5000 didn’t have acceleration problems, it was too late. It took the company two decades to recover. It is still unclear why CBS aired the feature. Some people wonder if another rival car company was behind it.

8. Ford Explorer Roll-Over Scandal

As one of the first popular SUV models, the Explorer from the early 1990s was the typical example of the concept. Big, powerful, luxurious, and capable, it could carry its passengers with ease over any terrain. Well, at least it looked like it could. Despite the popularity, alarming reports of instability and tendencies to roll over plagued the Explorer and the car public.

Apparently, the Explorer wasn’t stable at sharp turns and high speeds. This caused numerous crashes, injuries and even deaths. Slowly, the story unfolded, and Ford admitted they had concerns regarding stability and road holding. However, the tire manufacturer, Firestone, ensured Ford’s engineers they could solve the problem by deflating the tires below the recommended limit.

Ford did that, but the situation got even worse, evolving into a major scandal with Ford and Firestone as the main culprits. The aftermath of this scandal was a massive recall of Ford Explorers and a sharp decline in stock prices of both companies. They also faced big penalties, many lawsuits and a severe loss of reputation.

9. Toyota’s Unintended Acceleration

Toyota has always been famous for paying attention to the quality of its products. However, in 2012 they made a deal with the U.S. government to pay $1.2 billion to avoid criminal prosecution. This was when the global car community realized that even Toyota could cover something up. In fact, Toyota desperately wanted to hide the unintended acceleration on various Toyota and Lexus models due to a faulty part.

For several years, the company hid documents showing they knew about the problem but decided to do nothing about it. However, when the case was brought to light, Toyota paid all the expenses. They also settled out of court and recalled 9.3 million cars in one of the biggest recall cases in history.

10. Takata’s Exploding Airbags

The Takata case is still open and could be the biggest recall case in the history of the car industry. From 2000 to 2008, the Japanese company, Takata, produced at least 17 million airbags for installation in millions of cars. In fact, Takata supplied 10 of the biggest car companies in the world, which made things even worse.

The problem with the airbags was, under specific circumstances like moisture or heat, the airbags could deploy without a cause, creating a small explosion inside the car. Since the airbag is in a metal container, the tiny pieces could injure or even kill passengers in the car. All 10 of the world’s biggest car makers are working together to resolve the issue, but experts say over 30 million cars could be affected.

11. GM’s Ignition Switch Problem

GM was in the spotlight again in 2007, but not because of bankruptcy and their government bailout. This time, it was due to one of the worst cover-ups in recent years. The problem was a faulty ignition switch in many GM models, such as the Chevrolet Cobalt and Pontiac G5. In some cases, during the drive, the car would shut down completely, causing the driver to lose control and eventually crash.

But this wasn’t the worst part. When the ignition switch shut down, the engine also shut down the safety systems like the airbags and ABS brakes. This made the crash even worse since the passengers were left without protection. GM tried to cover things up by replacing the problematic part with an upgraded one, giving it the same part number. But eventually, reports of deaths and injuries started coming in, revealing the scandal.

The court cases are still active, and the death toll has risen to 124 people. However, GM is still trying to fight the case. Their main argument is that the faulty ignition switch is a part of the old GM and after the restructuring and government bailout, they are not the same company.

12. Volkswagen’s Dieselgate

In 2015, Volkswagen was the biggest car company in the world. But unfortunately, this position was severely shaken by the EPA’s legal action and alleged violation of the Clean Air Act. Apparently, Volkswagen was cheating on their emissions testing by installing special software in the diesel cars they sold on the North American market.

The software was on when they tested their cars for emissions, but it automatically shut off during normal use. Volkswagen marketed diesel cars as a cleaner fuel alternative, but in fact, they were polluting the environment more than regular gasoline-powered cars.

Soon, people called the scandal Dieselgate. It caused car dealers to put Stop Sale signs on all Volkswagen diesel products. There were also millions of angry buyers and a severe drop in sales. Currently, the Dieselgate situation is costing Volkswagen close to $15 billion in the U.S. market alone.

13. Ferrari 458 Fires

It is hard to imagine what could be the problem with one of the best sports cars of today but apparently, Ferrari issued recalls for all Ferrari 458s they made back in 2012. The cost of the recall was over $300 million. And it affected owners all over the world.

The reason was a series of unexplained fires that destroyed several cars. Engineers found that the reason was the glue they used to hold several components together. Due to the extreme heat the engine produced, the glue melted, causing devastating fires in a matter of minutes. It looks like they have solved the problem and the 458 still remains one of the best cars money can buy.

14. Firestone’s Exploding Tires

Despite the tragic scandal with Ford, the Firestone Company was under public scrutiny again in early 2000s when it recalled 6.5 million tires used by all manufacturers. The tires were known to explode for no reason, causing crashes, injuries and deaths.

The recall was terribly expensive and took over a year to complete. The U.S. Safety Commission estimated that Firestone’s tires caused over 200 deaths, and over 4,000 crashes and complaints.

These are the biggest scandals and cover-ups in the automotive industry. Some were accidental, some were intentional, and some weren’t even real, but they weigh heavily on the minds of car consumers everywhere. These car scandals show how important it is for car buyers to do their homework before heading to the dealership.

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