What BP Taught Takata

Mr. Nocera has a fatuous belief in corporations doing the right thing. Mr. Nocera has gotten very exercised about the exploitation of student athletes by the NCAA. And rightly so.

But the violation of people and the environment by BP is really small potatoes compared to guys running around in shorts.

Monetary penalties leveled on companies do not change the behavior of the people who run those companies. Risky or shoddy behavior generates short term profits which result in large bonuses for the human beings who lose little in later years where the effects of those decisions result in injury or loss of life to other people. My solution to this is simple. Where there is criminal behavior (often in the form of a cover up such as at GM), then the highest level executives who knew the "company's decision" to continue the practice, fail to notify the public immediately of the danger, etc, should be prosecuted in federal court, for reckless endangerment or manslaughter. - sentences (based on the number of people harmed) to be served consecutively. The risk of spending the rest of your life in a Federal prison, would dissuade most executives.

I find 'whether BP should have to pay monies to people who weren't actually harmed by their oil spill' very interesting. After the 1989 Exxoff Valdez spill, claimants such as my ex-husband, a Chiropractor, lost in the class action suit for payment to second-tier damages. The town was the only one actually oiled in three sequential tidal cycles. We made a lot of our profits from Alaska's Fishermen's Fund, funded by the commercial fishing licenses to have a worker's compensation program for fishing related injuries. Sounds good, right? You watch Deadliest Catch. All year long, a steady stream of back injuries, which many of the Russian Orthodox faith (who do not embrace Western medicine) chose Chiropractic treatment. The fishing season was closed in 1989 after the spill. Of course it was, Alaska couldn't have one drop of oiled fish arrive in a kitchen. The fishermen didn't fish, but were hired as boom tenderers and received quick checks based on prior-years' earnings. But how do you compensation the next layer? The fishing tackle store, the grocery stores, the bars, the Chiropractors, the medical doctors? Nope.The Courts' decision was zero. Our claim was CPA set at $150,000 for just the first year. Nothing, dismissed. I am so glad to read that people and businesses who weren't even harmed by BP spill got compensated. And in the irony, as I now live is SWFL, I saw the 8 foot tar balls as the oil left the Gulf of Mexico for the Atlantic. Twice. Just my luck.

CORPORATE CHARTER The language, prior to 1980, for all corporations chartered in the US included words like, In order to better serve the needs of the community by .... During the Reagan administration, the language was removed, freeing corporations from acknowledging their primary obligation: to serve the people. That was replaced by the Institutionalization of Greed, in the words of the late astronomer, Carl Sagan, when asked what Reagan would be remembered for. Now we know what's truly meant by trickle down. The needs of the citizens are not considered primary anymore by corporations. If manufacturers cause great harm by the production of faulty, shoddy goods, their quarterly profits are put ahead of the damage to the community. Going to court is what the corporations consider to be the cost of doing business, not their ethical duty to the citizens of the country where they operate. The entire rotten system is a disgrace. It makes a sham of the Declaration of Independence, placing corporate greed ahead of the Pursuit of Life, Liberty and Happiness. As things stand now, the raison d'etre of corporations is exclusively their bottom line. US citizens are entitled to primacy of consideration when corporations inflict damage upon them. It's called morals and ethics. To degrade the obligations of corporations merely to the cost of doing business is degrading, dehumanizing and soulless. The human spirit built the US; We The People have made the US what we are today!

Perhaps the price paid by BP for the destruction in the Gulf of Mexico will be a cautionary tale for other mammoth corporations which show such indifference to protecting our precious natural resources. A line must be drawn somewhere.

There was, not too many decades ago, an ethos among Japanese companies that put product excellence and responsibity to their customers as the highest callings. The catalyst for these considerations was quality control. When things went wrong, the heads of the companies would issue sincere and heartfelt public apologies, make amends to the injured and the public at large -- and then they would resign in shame. I'll take that strategy over the "let's fight it out in court" style of western companies like BP. Those were the days . . .

Litigation--the American way!
The American way is the plutocratic way (aka the "capitalist" way--the way of private ownership of "capital"--all resources, from Mother Nature's creations to those of politics-- property, tax and labor law--assigning "capital" to private (non-government) individuals--persons--natural as well as legal ones.

The legal system creates "legal persons" assigning them rights and duties; the "persons" then audaciously claim their wealth is a gift from Mother Nature--"natural rights." Amazing smoke.

When the private owners of capital do harm--damage to life and property--they then use the system that created them to minimize or negate compensation for the damage they do.

Law creates the players and rules of the game. Economics is simply about gaming the system--strategies for winning.

One way of weaseling out of paying damage dues is gaming the political system--lobbying for a loaded game. Often camouflaged as "job creation".

The two main ways of gaming the judicial system are
1. Selecting favorable judges or juries

2. Increasing the costs of litigation so most "natural persons" can't afford it.

Americans say, "You only get what you pay for." If you can't pay for legal (or political) justice, you can't have it. That's the American Way.

Sounds like a class action suit should ensue. Of course, there are millions of auto owners who are affected by this defective and dangerous part. I also imagine individual states, or even congress, could decide to penalize this company for putting so many Americans at risk. It surely appears to be a kind of terrorist or "mob" related crime, since they knew, very well, what they were doing while hiding it. Car manufacturers should share the blame.

So, it's all the fault of plaintiffs' lawyers and our court system, otherwise large corporations would always do the right thing. It is July. Reality must be on vacation.

When I read that companies should not use the Legal system ... it does make me cringe. The use of the legal system is the American way and I would not see any other way.

That the legal system might be perverted and that is another problem that need to be looked at by the citizenry. When the Legislative and Executive branch feel that the Judiciary need to be strangled to operate and left to its own device to find the cash to operate; victims becomes victims a second time and Big Corporation know it.

American Pragmatism (which is what this opinion advocate) is what actually perverse the system ... DA that prefer to settle, Big Corporations weighing the price of doing the right thing against the cost of litigation, etc ...

The Judicial system should be used and funded by everyone, and really accessible by anyone. It should be as natural to take someone to court as getting a license at the DMV, or voting.

Thank you Joe for bringing a little reality to the Times bubble. Usually the rhetoric is little better than "corporations are evil" from the NYT commenters.

The accident was horrifying and indefensible, and it was the result of serious defects in B.P.'s operations. The company was largely run by a shallow group of lads with no engineering backgrounds.

But, the spurious claims brought by many of the "victims" makes a mockery of the concept of justice. Calls to reign in the abuses of jackpot justice are not wrong.

Nocera likes to periodically come at us with these Big corporation makes nice pieces. I don't know what precipitates this but they are often shamelessly one sided. BP is not much different than any of the other big oil companies. It has routinely taken advantage of real or manufactured oil crisis by gouging consumers at the pump and for home oil heating. It has a track record of poor safety precautions and cost cutting measures that endanger employees, the public and the environment.

Now we are supposed to believe that BP turned on a dime and wanted to make nice and do the right thing. The behavior of people such as the lawyer who wanted compensation for losing his license is inexcusable and criminal. But we cannot loose sight of the bigger picture that many of the claimants and probably most were genuinely harmed as was our precious Gulf environment. There are always leeches and opportunist that take advantage of a situation by litigating false claims and yes we are a litigious society but how did we great that way. Maybe, just maybe it was based upon a history where people and corporations did not want to do the right thing.

Litigation is "the American" way largely because responsibility for corporate malfeasance is diminished to the point where it is accounted for as a "cost of doing business". This has been true since long before it was exposed in the Grimshaw. v Ford Motor Pinto explosion cases. If the real human and societal costs were allowed to be imposed in court, such behavior would be deterred, and no corporation would be willing to "take its chances" in court.

Between the avarice of the corporations and the lawyers, the little guy is left with very little indeed -- meager scraps on desiccated bones after the wolves are done.

I enjoyed Joseph Huben's suggestion that we treat corporate persons as real persons when it comes to awarding judgments or determining 'sentencing' for environmental calamities and products that kill or maim customers. I wonder if our 'conservative' Supreme Court justices would support extending a kind of "death penalty" to corporate serial killers such as Takata.

Much as with a delinquent NCAA football program, why not suspend or permanently shut down any corporation shown to be so cataclysmically negligent to have killed millions of sea creatures and the reefs they inhabited... or even a tiny number of humans who were naive or misinformed enough to trust in their unsafe product(s)?

The court system has become the guardian of corporate businesses. It is not functioning as justice at all, but for the protection of corporate interests. The Bible describes it thus: "Justice has fallen in the streets." No observer could see it otherwise, except those who delude themselves into believing that courts have special wisdom and are not subject to the bribery of corporation.

The court system must be added to the psychological community as useless functions in our culture. They have been taken over by special interests and they are laughing at the people. I am not sure what we must do but it must be soon and it must be drastic.

Takata also has the advantage of not being a retail brand. They do not have to fear a consumer boycott. Few if any will refuse to buy a car because it has a Takata air bag. BP customers, on the other hand, usually have another gas station across the street selling an equivalent product for the same price. Maintaining their good name was much more commercially important. I am sure this factored into their respective decisions.

Takata no doubt feels their paid for politicians have put enough "business leaning" judges in place to win this case in court.

Sometimes the "right thing" does not work out the way you hoped it would, but it still remains the "right thing."

The real lesson is in how business is driven to reduce costs at the expense of safety. BP, GM and Takata all were building products that were reengineered to save the company money, even if the resulting liabilities could blow up the company, or the economy in the case of Banks, securitized mortgages and the derivatives that "safeguarded" their newly engineered financial instruments.

First, why are corporate persons not held accountable? Paying a fine does not approximate the consequence a real person is apprised after killing 11 real persons. Fines are not adequate penalties. To provide comparable justice, fines should equal the years of incarceration that would typically be ascribed for each crime. Corporations should be required to pay the amount of profits that the company made during years prior to the crime. 110 months in the case of BP or about 9 years of profits. BP would be required to pay that amount immediately financed by issuing a bond. No tax deduction should be allowed for this crime. Takata apparently killed 8 persons and for that 24 years of profits should be their penalty.
Perhaps corporations should rethink their claims of personhood. Perhaps federal corporate charters should be required of all large corporations just so they could be held to lawful authority and not be able to purchase state legislatures?
What Takata learned from BP? Takata learned that killing people has a dollar value that is a cost of production. What Americans have learned from BP, Takata, and other large corporations? Individual deaths are expenses that are dwarfed by profits. Until the penalty for killing or harming real people is reflected in law, corporate persons are effectively monarchical. Corporations are today's aristocrats, exempt from the law.

The people and politics of this problem are also important to understand. See

http://www.careforcrashvictims.com/blog-takataconsolidation.php

And http://www.careforcrashvictims.com/blog-takatahiresdot.php

The obvious solution is for companies to be aggressive up front about chasing down and fixing any safety issues before they, often literally, explode in someone's face.

unfortunately, many MBAs and lawyers are trained to see safety as a cost- benefit issue, rather than one of basic human decency.

"Do the right thing"

Who determines the right thing, liberal Op Ed Times columnists?

Why would anyone expect ANY company to the 'right' thing for injured people? Companies do NOT exist for their customers. Customers are a necessary evil.

Companies (particularly public companies) exist for one single reason. To bring in more income for their owners (shareholders). Customers and products are simply the tools on which that income is produced.

From that point of view, BP was an outlier, trying to something "good".

Takata is in the mainstream in this instance. Their calculation is that shareholders and owners stand to be made richer if they fight.

This has _nothing_ to do with compassion, justice, or human lives. This has _everything_ to do with money and ownership.

America is such a sad failure: a nation that thinks it can lawyer its way out of any problem and where the one who out-lawyers wins.

I would say that lotteries is the American way --- the belief that everyone has a chance to be a millionaire. Litigation, in these cases, just a means to that jack pot mentality.

We need to remember that these corporate "people" are unlike real people, completely lacking in ethics, morality, and patriotism.

It sounds to me like a kind of three-legged stool of (1) the threat of litigation in court, (2) a more efficient administrative system out of court to provide settlements in real time, and (3) publicity through the media and through hearings in legislatures. I think without any one of those elements, it's a different scenario entirely, and the resolution of who will bear the burden of the damage shifts.

"...the company whose defective airbags have killed at least eight people and wounded more than 100."

Takata should have done a much better job addressing these defects and handling recalls of their air bags in a far more rapid fashion. I don't mean to sound cold, however, but 8 deaths is hardly carnage. None of them should have happened but to listen to the media you would think this was the most dangerous thing...EVER.

I get really tired of these bloviating politicians and their mock "outrage" for their own political purposes, who, coupled with a wretchedly greedy trial bar (some if the BP claims were outright fraud) who just see another cash cow to be milked. Neither the pols nor the lawyers have anyone's interests but their own as number 1 - this just serves as a convenient mask to show how much they "care". Disgusting pandering and shameless using of injured people.

Takata should be - and is - liable for deaths and injuries, but these giant public funds are just a sham and pot of gold ripe for manipulation. I don't blame them for saying no thanks.

BP didn't teach Takada anything. Takada is doing what any business does, trying to preserve assets. Setting up a compensation fund is an admission of guilt by default. The company would still be vulnerable to litigation from those who chose not to participate in the compensation.

Business does not operate on a moral platform. It operates on a profit/loss platform. Human beings are affected by morality, not large corporations.

Furthermore, the two cases are not comparable. The deaths from the Takata airbags are (most likely and yet to be determined) the result of an unforeseen manufacturing defect. The BP oil spill was the result of of an intentional top level managerial decision to save a few dollars, directly against the advice of the well workers who understood the dangers involved. To review, the well workers wanted to plug the well with a continuous column of concrete, which is done for maximum safety. The sheer weight of the column would counteract any surge in well pressure. The manager instructed them to plug the well with three short concrete plugs. The well pressure surged and blew out all three plugs. That one decision cost BP $50 billion.

Takada does not have the size and resources of BP. They can't absorb the potential losses, deserving of them or not. They have to fight to survive. The have a right to their day in court just as the victims do. That's why we have civil courts and yes, that is the American way.

Litigation is not really the question here. It is the forum where we decide such things. Rather, access to litigation and the grounds upon which a case may be won are in serious question. The business lobby has successfully removed most standing for litigation against them including changing the rules on class action to demanding customers sign blanket agreements to binding non litigation clauses embedded in even the most insignificant click on a web site just to consider being their customer. There are also the non-competes and other legal restraints on workers diminishing whistle-blowing as well. Even when an individual does have a decent case, finding a lawyer who will take the case is almost nil because no one who needs to file such a case has the financial ability to finance such a case.

Bottom line, justice leans far in favor of business leaving the individual danging by a thread. This is the real problem.

The real lesson from costly settlements is that managements of companies who determine long before damage is done that their products or services can cause extreme harm must act quickly to remove the danger. Neither BP not Takata did so, and they both paid and will pay the price. It is not about determining to how best to minimize the cost of litigation versus settlement, it is doing what's right, and what is necessary to avoid the damage in the first place. The lesson is to be found in the chapter on integrity.

What is so wrong about this is how a company, not just an auto manufacturer or supplier, but any company, really, have product liability issues and then dive for cover under blankets of litigation issues that take years to uncover. Whether it be Toyota, GM or Ford, by the time these claims have been litigated, the main personalities in the lawsuits have in many cases died or retired, and the victims and families have in some manner dropped out of the picture. After all, in so many cases, we are not talking about current product or current designers, managers and other employees associated with bad design due to cost-cutting issues and associated bonuses, but actions that occurred, in some cases, nearly 20 years ago. There has to be regulations and procedures in place that pinpoint design and safety flaws much quicker, and if theses flaws are swept under the rug by the global manufacturers, to get them in court and have a strict time frame for the trials. There needs to be much more governmental oversight of such things as bonus and incentive pay, as merit remuneration often leads to an over-competitive, overzealous work environment where quality and safety suffers and resultant issues are, as I said earlier, swept under the rug. If merit pay is received, there needs to be someone concerned with quality and safety asking a basic question: Why?

Dear joe,

You don't have to provide the reasons why you think BP--the company that routinely kills its workers with its "cost control" measure, for instance the 11 who died in the Deepwater Horizon well blowout tragedy--since it is obvious that you must have your reasons, no matter how personally embarrassing they may be. But there is simply no way you can possibly convince anyone that BP is an innocent, well meaning bunch of Eagle Scouts committed to doing the "right thing." If they couldn't get any sympathy in a state where 90% of the politicians work for the oil companies first, and the citizens second if at all (and where even the governor's brother is an oil company lobbyist), all that means is that what they did to the Gulf and the Gulf Coast states was so horrific that sympathy was out of the question. I live here, i know, and believe me, the damage continues to this day and will for many years to come. BP got off very easy for the simple reason that this is a very pro-oil region. You don't have to whine for them. They have lots of PR men and professional whiners on retainer. Takata and BP are in business to make money, and both have a tendency to let bottom line issues blow up in everyone's face, including theirs.

No surprise here. BP tried to do the right thing and put compensation money directly into the hands of those who had suffered genuine loss. That didn't sit well for those lawyers barred access to this colossal trough. The example of $172,000 being paid to a Louisiana lawyer who had lost his business license a year before the spill is trivial compared to the tens of millions that were authorized to those who made claims for losses unrelated to the oil spill. Sure, Takata should compensate everyone in the past and future for defective products. But who can blame them for limiting their losses and not repeating BP's mistakes. Compensation funds should be used for making victims 'whole' and not 'divvied up' between lawyers.

Litigation is a two-edged sword but by and large I think there are a lot of abuses. All people need to do is to follow the money. Lawyers in this area are fabulously wealthy and their interest groups are some of the most generous donors to politicians, irrespective of the latter's party affiliation.

That said, evidently GM chooses not to learn from the BP example. Of course, cynics could argue GM has a trump card, namely the new-GM's get-out-of-jail card.

If Takata indeed learns its tactics from the BP case as prescribed by Mr Nocera, then it is a Japanese corporation without moral, let alone its ancestral roots a la Japanese sense of decency. True that maybe Toyota has started it. So maybe it is an indictment that the codes of ethics every corporation included in its mission statement is just lip service

The cases are different in some aspects. Before Deepwater Horizon BP was a well known firm dependent on retail operations selling petroleum products directly to the public. The initial efforts by BP to be seen as vigorously "doing the right thing" was as much a public relations effort to preserve brand image as it was an effort to reduce possible settlement costs. Takata was a wholesale supplier to manufacturers that no one had ever heard of before the air bag issue arose in the public eye and it will do its best to disappear back to obscurity, probably under a different name, after the settlement of claims. Also, the number of people who can legitimately claim to have been harmed by the BP oil spill is vastly greater than those harmed by Takata's exploding air bags.
Different circumstances, different strategies.
As to "sadly, litigation is the American way," I, for one, gladly see litigation as the best way I can see to make those responsible for harming others to "do the right thing."

Whatever Taketa does or doesn't do, the people most affected will be left out. Because if resolving claims means "winnability" in court, it will depend on plaintiff's lawyers, not the justness of their cause.

Like most people, I drive a car with Taketa airbags. It's a new car, so I'm not holding my breath every time I take the wheel like I did with my old Honda (never part of the recall...or was it? There were so many affected it was taking weeks to compile the list of VINs).

Taketa has cornered the market for airbags. As a practically sole source provider, it approaches these defects with the arrogance of a monopoly. The fact they ignored the claims (like GM did with ignition switches) for so long is not only resulted in preventable injuries, but provides a miserable example of business ethics--eg, expediency.

I understand the decisions. And the costs. But it Taketa had done the right thing, fixed the problem, and retooled their factories, they wouldn't be in this hot mess--BP or no BP to guide them. The oil spill was due to gross negligence on the rig. Taketa knowingly let consumers drive death machines, knowing drivers had few choices in suppliers of their airbags.

Frankly, I'm not impressed with their "strategy" to win in court. That won't bring back 8 mortalities and a host of jarring injuries, not to mention the psychological feeling of drivers every time they take the wheel.

Looked at dispassionately, BP mishandled the affair. They agreed to compensation and settlement funds while the images of the oil gushing out were still on television and passions were high. If they should have stonewalled, fought each case and only grudgingly set up a fund for making good, it would have cost them a lot less. They were vilified, the CEO was forced to resign and they ended up in court anyway, so all their desire to do the right thing ended up for naught.

Suing or filing claims for damages has become a sub-industry in America. This does not imply that many of the claims are not valid, but it does indicate that lawyers have learned to pump the money channels until they are almost dry (see: asbestos).

If one travels to areas of our country where unemployment is high, there is a treat available on local television: repeated, almost endless commercials urging local residents to sign up, NOW!, for class actions and other claims against corporations. "Get in on it while you can," they urge, in slightly less direct terms.

We watched some of the local channels from Johnstown/Altoona, Pa., not too long ago, an area with high unemployment and plenty of bankrupt businesses, and it was astounding to see how many commercials there were for law suits. When benefits run out and the food stamp program is the only steady thing many people have going for them, a big payout is like playing the lottery, with a higher chance of winning. (Social Security disability claims also jump in such areas.)

Keep in mind, the lawyers get at least 1/3 of the awards (usually with expenses added on top), so the incentive for them is high indeed. The actual victims might get $2.92 each, by the lawyers can take home millions.

I am not friend of corporations befouling the world and running from responsibility, but running a business involves protecting its value. The bosses have to choose which way is best for survival. Their lawyers insist.

The two examples seem far from analogous. Death or serious injury by malfunctioning air bags would be hard to fake... but claiming damages from a deep sea oil spill could, and appears to have been, a bonanza for unscrupulous creeps and some attorneys who feel entirely comfortable conflating fact with fiction. Not sure what happened with BP gives Takata moral ground on which to stand, especially when the aggrieved are relatives of those killed.

Poor little corporations like BP. Poor little corporations who can only hire thousands of lawyers to make sure they pay as little as possible to their victims but won't pay a penny before the accidents happen to prevent them. Of course you can count on Joe to sing the corporations are victims song. He always seems to find a way.

Corporations aren't victims they are greedy perpetrators who don't care how many humans they have to cure or injure to make a million or a billion.

In an airline emergency, you must remember to put the oxygen mask FIRST on the lawyer, THEN on the mom and kids.

We seem to have avoided the "crunch" that so many were predicting back in the sixties and seventies, just as we seem to have avoided global thermonuclear war that seemed so imminent in October, 1962. But if either ever DOES come, you can bet that the two lifeforms that will emerge from the conflagration relatively unscathed will be cockroaches and American lawyers.

Let them eat metallic fragments from airbags.
If they don't like it, so what? Sue us. Our huge
"objection" of attorneys will protect our profits.
See you in court losers.

BP should have paid for clean up for the Gulf for any negligence. But the Gulf also invited and allowed them there in the first place. And I never understood the 9/11 fund. I get that the airlines and government were afraid of lawsuits but I never understood people getting millions of dollars when the first world trade bombing victims didn't. And I don't know but also Timothy McVeighs victims? That always seemed out of line to me. Those families hurt just as much.
I would absolutely follow what Takarta has done. Their attorneys are getting paid either way so not just doling out cash to every Tom, Dick and Harry regardless of whether they were injured is a lot smarter.
Also, there is subragation issues. I'm sure they will settle directly with people whose airbag went off without contact with another vehicle, but if the airbag was initiated from contact with another vehicle who may be at fault, they can claim the accident was the liability of the opposing driver and the responsibility lies at that driver's insurance company.

Takata doesn't have to be in a rush to do much of anything, considering there's no one else around to handle the surely-record-breaking number of recalls. On the other hand, they don't have anything similar to "oil in the ground" as a hedge.

Dear Mr. Nocera,
So justice in this country is, basically, the old bumper sticker: "My lawyer can beat up your lawyer."
Corporate entities will always seek to do what's best for their "bottom line" and since, as evidenced by the lack of people going to jail for the "Biggest Financial Disaster Since the Great Depression" in 2008, all they have to do is "pay a fine" (Yes, $18.7 billion sounds like a lot until one looks at BP's assets and income; slap on the wrist anyone?) and move on to the next disaster.
At least, with the oil companies, the taxpayers aren't being asked to "bail them out", yet. I'm sure K-street and the "lobbyists" are working on that one.

BP mishandled its effort to avoid litigation, and ended up in litigation anyway.

That does not mean it was error for BP to avoid litigation. It was error to mess up the effort and end up in litigation anyway.

It does not mean that litigation was better or cheaper, just that the other idea was bungled.

Takata took the wrong lesson from this.