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Billion dollar recalls

A pedal that caused a car to inadvertently accelerate, a hip replacement device that led to repeated surgeries and an outbreak of contaminated peanuts that resulted in a 25% industry-wide reduction in sales. Below are some of the largest – and most costly – recalls of recent times.

(Source: AGCS_Product Recall Report)

(Source: AGCS)

2016 EXPLODING PHONES

Samsung recalled 2.5 million Galaxy Note 7 phones after users reported flames and explosions caused by overheating batteries.

Estimated cost: $5bn+ [1]

2015 AIRBAG ERRORS

One of the largest recalls to hit the auto industry, expected to result in some 60 to 70 million units across at least 19 manufacturers being recalled worldwide. Japanese manufacturer, Takata filed for bankruptcy in June 2017.

Estimated cost: $25bn+ [2]

2014 AUTO IGNITION FLAWS AND OTHER ISSUES

Issues such as ignition switch flaws meant General Motors had to recall over 30 million vehicles in total through 2014.

Estimated cost: $4bn+ [3]

2010 HIP HICCUPS

Johnson & Johnson subsidiary, DePuy Orthopaedics, recalled hip replacement devices due to a high level of repeated surgeries. More than 90,000 devices had been implanted worldwide.

Estimated cost: $3bn+ [4]

2009 FAULTY PEDALS

Automaker, Toyota issued a recall on over four million vehicles to fix faulty pedals that led to unintended accelerations. In total an estimated nine million cars were eventually pulled back for pedal-related flaws.

Estimated cost: $3bn [5]

2008 PEANUT CONTAMINATION

One of the largest food recalls in US history, triggered by salmonella fears. More than 4,000 products, produced by over 200 different companies, were impacted, triggering an industry-wide 25% reduction in peanut sales. The company responsible, Peanut Corporation of America, filed for bankruptcy.

Estimated cost: $1bn+ [6]

2005 ARTHRITIS DRUG RECALL

The Food and Drug Administration in the US requested the removal of the Pfizer arthritis drug Bextra from the market due to side-effects.

Estimated cost: $3bn [7]

2004 ARTHRITIS DRUG RECALL

Merck recalled Vioxx, another arthritis drug, after a study found that patients who took the drug were more at risk from heart attacks and strokes.

Estimated cost: $5bn [8]

www.agcs.allianz.com

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DOWNLOAD THE AGCS_Product Recall Report

 

 

FOOTNOTES 

  1. Samsung’s losses from Note 7 disaster keep mounting, money.cnn.com, October 14, 2016
  2. Takata puts worst-case airbag recall costs at $24bn, Bloomberg, March 30, 2016
  3. GM’s total recall cost: $4.1bn, money.cnn.com, February 4, 2015
  4. As lawsuits climb, J&J may have new hip trauma, Reuters, July 12, 2012
  5. The most expensive product recalls, Bloomberg January 17, 2013; Top 10 product recalls, Time, January 29, 2010.
  6. 2016 Emerging Trends in Product Recall and Contamination Risk Management, Aon
  7. The ten worst drug recalls in the history of the FDA, 24/7 Wall St, December 10, 2010
  8. The most expensive product recalls, Bloomberg January 17, 2013