GB 110 Assurance Of Learning Problem: Business Law Coursework

GB 110 Assurance of Learning Problem Due November 21, 2017You are Lead General Counsel and Ethics Compliance Officer for American General Inc. one of the 3 major car manufacturers in the United States.  American General is currently preparing to rollout a new car called the Sapphire.  The car’s expected gross sales will be approximately 500,000 units per year.  The car’s marketing will be aimed at young professionals with a price point of $28,000 per unit.  Net profit per car is approximately $2000 per unit produced.  The Sapphire is a new line of keyless ignition cars. Keyless ignition cars allow drivers to start their vehicles by simple pushing a button labeled start/stop.  For keyless ignition cars you don’t need a traditional key but you need a special fob.  The fob can stay in your pocket or purse because it broadcasts a signal to the car’s computer. The computer recognizes the fob’s code, and lets you start the engine. Keyless ignition is great not only for convenience but it also discourages theft because there is no physical key to start the car.American General’s economic health has been slipping the last several years and with increasing pressure from foreign imports, the company sees the Sapphire as a way to catapult them back to the front of the market and reverse their downward trend.  If the company cannot reverse the current trend they will be forced to downsize by closing two plants located in Ohio and Michigan, meaning a loss of approximately 1000 jobs, and ship production overseas.  The Sapphire is seen as the Company’s last great hope.It is March and the car is going through a repeat of its final safety testing.  The expected rollout date is September of this year.  The car is repeating its testing phase because in its prior testing phase an anomaly was discovered.  Five cars were chosen at random from the pre-production line and driven by design engineers to evaluate all of the car’s safety systems.  In one of those tests, when the engineer pressed the start/stop button to turn the ignition off the car remained running. If the car is parked in a closed garage attached to a house the carbon monoxide fumes from the idling car may seep into the living area, causing harm. The problem test car was turned off and there were no further anomalies.A careful inspection of the ignition button revealed a slight manufacturing defect, which may or may not have caused the problem.  Additionally the spring, utilized in the ignition button (the part that you push on and off) was at the lower limit of the design specification, which meant you had to push down on the button hard and hold it for a couple of seconds, before the car would turn off. The engineers were split on whether the problem was serious enough to halt production, given that they could not repeat the problem.  They did calculate that redesigning of the button and retrofitting existing pre-production models to conclusively eliminate the problem would take 8 months, and increase cost of production by roughly $15.00 per car.  This would also cause a delay in the rollout of the Sapphire to December, two months after all other major competitors.In a confidential in-house report the problem with the ignition button was revealed. The report also indicated that if a user fails to turn of the engine, the engine remains on no matter how far the fob is from the car or how long it has been removed from the vicinity of the car. Some other car manufacturers that use keyless ignitions, use a sound (either an external chime or chirp of the horn) to warn drivers that the engine is still on. Adding a sound would not add any time to the production but it would increase cost of production by roughly $5.00 per car. Another option is to install an automatic engine shut-off, therefore, if the car is left running and the fob is not in vicinity after a specified period of time the car would shut off. This would add an additional 1 month of production moving the rollout of the Sapphire to January and increase cost per car by an additional $5.00.  The likelihood of button failure which may result in carbon monoxide poisoning was calculated at .001%.It should be noted that the car does meet all current Federal and State regulatory guidelines.  The car also is within design specifications.  The Company’s President would like your opinion on an appropriate course of action on her desk by the next morning.  She would like you to specifically address the following: 1. Must American General delay or halt production? What is your reasoning?   In answering this question, think about:a. Whether more information is needed from actual users?b. Whether any notification to outside parties of this matter is required? Presently the issue is only known by 7 individuals and the company president has said she prefers to keep the matter "in-house" if possible. Should you notify anyone whether you decided to halt, delay or do nothing, given that the issue is only known by 7 individuals and can be kept in house?c. In answering Question 1, is your reason legal, ethical or both? Explain.
2. Do you have additional suggestions on the best course of action for American General? Explain your suggestions.
Please be sure to include your name and your student I.D. number on your response.  Please limit your response to one or two single-spaced pages, Times New Roman 12 point font, one inch margins all around.A well written response will demonstrate the following:(1) Identification of the ethical issues grounded in the context of the ethical theories we have studied this semester.(2) An understanding of the relationship between what the law requires and what ethics would require.(3) An awareness and understanding of the social responsibility of business, using different models including but not limited to the stakeholder model of ethical decision-making.(4) An understanding of the consequences of these decisions both legally and ethically.