Mistakes while making a part or operating a production line can be very expensive. It costs much more money to repair a mistake then building it in the first place. The first place that you lose money is in the cost of the material utilized to make the defective part. Not only do you have to pay for the materials again, but you also have to pay for the labor as well.
Paying for labor is expensive to start with, why pay twice to make the same part? After scrapping or reusing the material, you next have to factor in the time that was wasted to fix the problem. Was it a problem with the assembly on the floor or were the parts defective before they were assembled? Maybe the machine that punches out the parts was malfunctioning. How many bad parts did it make? How many of those bad parts are now in your final product? How many of them made it into the hands of your clients?
The problem should be able to be spotted right away and there should never be more than one bad part made before it is found and fixed. If the parts did make it out of the factory and into the hands of your customers, what types of damage can that mean? Are those customers going to trust you to do the work that they had in the past or are they going to lose faith in what you are capable of?
After the problem is found and a plan is put into place, how timely is it carried out and do your customers have good faith that you will correct the problem? Look at how Toyota handled the problems with their sticking brake pedals. For some people it was too late when they started to fix the problem, but it appeared to the general public that they began to solve and fix the problem the minute they became aware of it.
Have they lost future and current customers because of the disaster?
Maybe they have, however they have most likely kept more because of the swiftness and thoroughness that they tackled the problem. Customers will understand for the most part if it's a problem that does not have catastrophic consequences as long as you're up front and offer a quick solution to the problem. What they dont want is delay and excuses.