Corporate responsibility or limiting liability?

Corporate responsibility or limiting liability?

There was an article in the Concord Monitor on May 6 about Peloton recalling about 125,000 treadmills after a 6-year-old child died in February by being pulled under the rear of the machine. That was not an isolated incident. There had been dozens of reports of accidents involving children and pets being pulled under the machine and seriously injured. On April 17, the U.S. Consumer Product Safety Commission (CPSC) issued a warning to people who had pets and children to stop using the treadmill. In response, Peloton stated the warning was “inaccurate and misleading.” The company told its consumers to keep children and pets away from the machine “at all times.” They felt that just issuing a warning would suffice. On April 20, a consumer class action lawsuit was filed against the company, and on April 29, a second lawsuit was filed on behalf of Peloton investors who complained that the company’s failure to recall the product caused a drop in the value of their stock. On May 5, Peloton finally acknowledged that the exercise machine was dangerous and issued the recall. The company is refunding customers the cost of the machine, which is $4,295. The day the recall was issued the stock lost 15% of its value, dropping by $4.1 billion in one day. Is this an example of corporate responsibility or a case of a corporation trying to limit financial liability? I’d like to think Peloton recognized the error of its ways and pulled the product because […]

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