A product recall is a request to return to the maker a batch or an entire production
run of a product, usually due to the discovery of safety issues. The recall
is an effort to limit liability for corporate negligence (which can cause costly
legal penalties) and to improve or avoid damage to publicity. Recalls are costly
to a company because they often entail replacing the recalled product or paying
for damages caused in use, albeit possibly less costly than indirect cost
following damages to brand name and reduced trust in the manufacturer.
A
good example is the recent recall of over 500,000 Toyota Tundra pickup trucks.
The Tundra had a steering problem which resulted in several accidents, forcing
the manufacturer to attempt to right the problem. |
