Tesla’s Seat Belt Recall, Moral Luck, and Ethics Chess

Jaws victim

Ethics Alarms Chief Ethics Scout Fred found this one. Tesla was alerted to one seat belt failure in its Model S, and  recalled them all. This involved a huge cost, of course, and that cost will be eventually passed on to consumers and investors. Fred asks,

“Abundance of caution” is the phrase they used, one I gather is familiar to lawyers. Could they have justified some other response that was less catastrophically expensive? Would they have had a fiduciary duty to do so? Or would that duty lie in maintaining the brand image of meticulous quality at almost any short-term cost, building a reputation that could command premium prices for decades to come?
The issue was simply this: how much did the company want to bet on moral luck? Tesla was aware of a possible design or manufacturing flaw that could kill passengers. It could have been a fluke, and it could have been widespread. If the cars were not recalled—and I don’t know enough about Teslas to presume that there would be any other way to check every single car or replace the seat belts without the expense of a recall, so I will assume for this discussion that there is not—and one or more passenger was killed, then Tesla management would have suddenly become Sheriff Brodie and Mayor Vaughn in “Jaws,” as articulated, with a slap, by the mother of a little boy who became shark bait while playing on his yellow raft. They knew there was a possible danger, and decided that chancing it was a better call than risking the summer tourist business. They balanced the risks, and did nothing.

This isn’t the Pinto situation, where Ford knew that a certain number of deaths would occur from a design flaw and calculated that paying off victims and families would be cheaper than fixing the problem. (That was also the calculation in the unjustly infamous McDonald’s hot coffee law suit.) This would have been just a gamble. If moral luck worked in the company’s favor and no other seat belts failed, the company would have ducked all bullets and saved millions. If moral luck bit, however,  and there was even a single fatality, an executive was going to have to sit on a witness stand in court and, under oath, answer this question:

“So let me get this straight for the jury. You were aware that a seat belt had failed, you had no idea why, and that a similar failure in another car you manufactured could lead to the death of a driver or passenger, or a child. Yet you made the decision to do nothing, potentially exposing all of your customers and their passengers to death of injury, gambling that the one seat belt was a fluke, correct?”

No responsible manufacturer can risk being asked that question. Ethics Chess demands that a ethical decision be based on considering the likely and unlikely chain of consequences that will flow from it, including plausible worst case scenarios. In this case, as in fictional Amity, the worst case scenario is simply too dangerous and damaging to risk. Surrendering control to the vagaries of moral luck in such a situation is both bad ethics and bad management. Moreover, as Fred suggests, appearing to apply excessive caution (though in this case it really isn’t excessive) in the interests of safety has real benefits for Tesla. It shows potential customers that the company can be trusted; it will be interpreted as the mark of a corporation that places safety over profits, though that’s not quite accurate either.

Like so many business decisions, the ethical thing to do is also competent, smart, prudent, responsible and in the best interests of the company. Surrendering to moral luck almost never is.

[Some other good accounts found by Fred are here and here.]

 

8 thoughts on “Tesla’s Seat Belt Recall, Moral Luck, and Ethics Chess

  1. I had driven the roadster years ago since I have a Corvette. Right now I am seriously considering the purchase of P85Ds that has ludicrous mode that will give me 2.8 for 0-60. I had tried one out with insanity mode awhile ago. I love the car – really do. I may sell a kidney and buy it. Always loved speed items. I also bought a small block of stock a few years ago and that has performed as well as the car.

    That aside I love the responsibility of stepping in when just one issue arises. They are certainly attempting to cement a market share and keep the positive PR. Lexus did a similar recall many years ago. My aunt had one and there was a reported incident with – I believe – windows. Two reported incidents and they brought her car in, checked it out, gave her a loaner car and then detailed the vehicle.

    Auto manufacturers apparently have a history of subterfuge, delay and downright denial when faced with issues that impact the bottom line. Just note the pathetic song and dance from GM a few months back.

    Hopefully, this quick response will be part of Tesla’s corporate culture but I’ll wait a few years to see if they eventually turtle.

  2. They actually may have another reason to do this, at least this one time. Some states like New Jersey don’t allow Tesla’s to be sold because Tesla sells direct to consumer with no dealerships. I think states like New Jersey justify mandating dealerships because manufacturers “can’t coordinate maintenance and recalls”. Perhaps they went looking for a problem so they can demonstrate their abilities to handle a recall.

  3. I owned a Honda up until last year, until a deer took a gamble that it could get across the same stretch of road faster than my car could. Mr. Deer ended up taking a short flight further down the road, and my car ended up taking a short tow to the junk yard.

    No one (human) was hurt in this instance, and for that I am grateful.

    However, Honda still has my contact information, and sent me a notice that my airbag, which had already been replaced at the dealer, might shoot out metal shrapnel. Both the deer, myself, and my front seat passenger might have died, if the dear strike happened slightly differently, and the damn airbag had gone off.

    I am extremely angry at Honda for this failure at multiple levels in their corporation. I may never buy another little beloved little green death trap over this incident. The entire automotive industry is tainted by this incident. One leading airbag manufacturer decided to cut costs by using inferior materials. Some engineer, somewhere signed off on this design change, in direct violation of Canon 1 of every engineering professional organization’s code of ethics:

    “Engineers shall hold paramount the safety, health and welfare of the public.”

    This irresponsible decision penetrated deep into the industry. Suddenly competitors could not offer as good a price, so THEY adopted the faulty materials. Engineers at the auto manufacturer signed off on using these inferior designs. Their bosses were likely thrilled at the savings.

    Now, nearly every car on the road uses some variation of this inferior design. Ex-post facto correction can only go so far. Multiple safety features in these vehicles are precisely calibrated using the the specifications of the original airbag. It is nearly impossible to simply replace one design for another without a major re-engineering and reconstruction of the vehicle. They can only make minute corrections to replacement parts and hope for the best.

    This jaloponik website asks how could Telsa find it ethically permissible to issue such massive recall over a single failure. It is simple. A good seat belt design does not fail under accident conditions, not even once. Barring external damage, this should never happen. (Honda, to its eternal credit, offers lifetime free repairs to external damage to its seat belts.) Similarly, of course, a properly designed airbag does not shoot metal shrapnel. Not even once.

    Tesla taking swift corrective actions over its engineering error is absolutely necessary. Errors and failures are a fundamentally impossible to prevent. The art of engineering is creating redundant capacity and detection systems to detect and provide early warning to mitigate the inevitable risk of errors and failures.

    Engineers are given blind deference from the public as professionals. Swiftly identify and correcting their rare errors is absolutely essential to maintaining their worthiness for this trust.

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