GM & Toyota Feel the Sting of Public Outrage

Just as auto industry news was getting monotonously joyous, General Motors and Toyota, the top players in the game, are suddenly in the headlines for the worst reasons.

In the recent case of a faulty ignition switch in several GM models linked to 12 deaths, resulting in the recall of 1.6 million cars, the decade-long willful lack of company action despite mounting evidence is the issue of public ire and government investigations.

GM boss Mary T. Barra has been aggressive getting out in front of the scandal, doubling down with an additional recall of 1.4 million more vehicles with possible defects. But this incident will play out in a tangle of civil suits and possibly a hefty criminal penalty.

For Toyota the just issued $1.2 billion criminal penalty for concealing defects that lead to a torrent of unintended acceleration claims in 2010, is a slap on the wrist relative to its current annual operating profit of $22.81 billion and cash reserves of $60 billion.

But for a brand built on customer loyalty based on integrity and reliability, it is a shameful blow for Toyota.

This George Polgar of GT Marketing for KYW News Radio.