- Product recalls cost companies millions and even billions of dollars. Read on to learn about 5 of the most expensive recalls in history.
- Upon impact, Takata airbags would explode shooting metal pieces in the direction of passengers. The recall cost the company $24 billion.
- In an attempt to cut corners, Volkswagen’s diesel engines displayed false emissions results. Once uncovered, the recall cost the manufacturer $18 billion.
- Within the first 2 months of its release, it was reported that 96 Galaxy Note 7s had caught fire due to a faulty battery. The recall cost Samsung $5.3 million.
- The Pfizer Pharmaceutical Company lost $3.3 billion for illegally marketing its drug Bextra and selling an arthritis painkiller that was linked to skin disease and heart failure.
- The Peanut Corporation of America recalled 4,000 products due to a huge breakout of salmonella in 2009. They lost $1 million before filing bankruptcy.
Many product recalls can be caught before the items leave the facility. There are several checks and balances in place to make sure that a product is safe before it is available to the general public.
However, no system is perfect and it’s not uncommon for a defective product, whether it’s an expensive car or a child’s toy, to slip through the cracks. These oversights can not only put people in harm’s way but can also cost companies lucrative amounts of money.
The Takata company manufactured airbags for almost every leading automaker in the world. On the surface, Takata was set up to have one of the most profitable businesses in the automobile industry. Unfortunately, this came to a screeching halt when a default was discovered in their airbags.
Upon impact, the inflators could explode sending metal pieces, not unlike shrapnel, in the direction of passengers. The airbag malfunctions have been associated with over 20 deaths. So far the recall has cost the company $24 billion and may take until the year 2023 to completely eliminate them from vehicles.
Volkswagen Deisel Engine
The Volkswagen company is infamous for its “Deisel-gate.” The car manufacturer had implemented proprietary software that would cut it’s emissions results in order to meet the appropriate standards.
Their vehicles actually produced 40 times more pollution than the permitted rate and had to recall 11 million vehicles costing then $18 billion.
Galaxy Note 7
In one of the most infamous technological recalls in recent history, Samsung had to discontinue its Galaxy Note 7 due to its battery catching on fire. A reported 96 phones caught fire within the first 2 months of the phone’s release forcing Samsung to recall 2.5 million phones.
Since the Galaxy Note 7 was one of the most expensive phones on the market at the time, the recall and halted production cost the company $5.3 billion. They have since then recovered from this huge setback.
In 2005, the pharmaceutical company was called out by the FDA for its arthritis painkiller, Bextra. The medicine was linked to life-threatening skin diseases and possible heart failure. But this wasn’t Pfizer’s only issue with the painkiller drug.
Five years later they were accused of illegally marketing Bextra and lost a court settlement. The fraud cost them $2.3 billion in a payout and in total, Pfizer had to spend $3.3 billion on the entire Bextra recall.
Peanut Corporation Salmonella
The Peanut Corporation of America was responsible for a huge outbreak of salmonella back in 2009. The peanut processor provided peanuts to approximately 4,000 products that resulted in nine deaths and hundreds of illnesses.
The company declared bankruptcy but not before the recall and lost production cost them $1 billion. Possibly even more costly than the loss of finances was the imprisonment of a top executive who was handed a sentence of 28 years.