Feds hit GM with $35M fine over recalls

 

Federal regulators on Friday slapped the maximum $35 million penalty on General Motors for delays in vehicle recalls.

The Transportation Department’s National Highway Traffic Safety Administration (NHSTA) said that GM has agreed to pay the fine as part of its investigation into delays in the recall of 2.6 million cars because of defective ignition switches.

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“What we cannot tolerate, what we will never accept, is a person or a company that knows danger exists and says nothing,” said Transportation Secretary Anthony Foxx during a press conference. “Literally silence can kill.”

Foxx said GM knew for years about a problem with the ignition switches that could inadvertently stop airbags from deploying when it announced a February recall of the Chevrolet Cobalt and other models.

“They had that information and they told no one,” Foxx said during a press conference.

“Had GM acted differently, perhaps some of these tragedies might have been averted," he said.

David Friedman, NHSTA’s administrator, called the evidence his agency found behind GM's failure to report the problem was “deeply disturbing.”

As part of the agreement, the agency also ordered GM to make wide-ranging internal changes of how it reviews and measures the consequences of safety-related issues in the United States.

Foxx said the aim is to overhaul its "safety culture" so the problem is not repeated.

"The fact remains that GM did not act and did not alert us in a timely manner. What GM did was break the law.”

Foxx has urged Congress to consider legislation that would increase the maximum penalty to $300 million from $35 million.

“For now, these penalties should put all automakers on notice that there is no excuse and zero tolerance for failing to notify the federal government when a defect puts safety at risk,” he said.

GM said in a statement that it has already started reviewing its processes and policies to avoid future recalls.

“We have learned a great deal from this recall. We will now focus on the goal of becoming an industry leader in safety,” said GM CEO Mary Barra. “We will emerge from this situation a stronger company.”

To that end, Jeff Boyer, vice president of global vehicle safety, who is charged with overseeing the changes said he has more than doubled the number of safety investigators from 20 to 55.

He also said GM has created a new group to improve safety oversight, is encouraging employees to point out potential safety issues and is increasing requirements for their engineers.

“We are working hard to improve our ability to identify and respond to safety issues,” Boyer said in a statement today.

GM also will pay civil penalties for failing to respond on time to the agency’s document demands during the investigation.

The problem with the ignition system is connected to 13 deaths and 42 crashes.

Foxx said it would be up to the Justice Department to pursue any criminal charges. 

This story was updated at 12:50 p.m.