General Motors to pay record $35 million fine for delayed response to ignition recall
May 18, 2014
General Motors has agreed to pay a record $35 million fine and take part in oversight requirements as a result of findings from the National Highway Traffic Safety Administration's investigation on the Chevrolet Cobalt and the automaker's failure to report a safety defect to the agency in a timely manner.
The defect caused airbags in some Chevrolet Cobalt and other GM models not to deploy.
This action is the highest fine ever paid as a result of a NHTSA investigation of violations stemming from a recall.
As part of the agreement, the agency also ordered GM to make changes to its review of safety issues and to improve its ability to evaluate the possible consequences of potential safety defects.
"While we will continue to aggressively monitor GM's efforts in this case, we also urge Congress to support our GROW AMERICA Act, which would increase the penalties we could levy in cases like this from $35 million to $300 million, sending an even stronger message that delays will not be tolerated," said U.S. Transportation Secretary Foxx.
Federal law requires auto manufacturers to notify NHTSA within five business days of determining that a safety defect exists or that a vehicle isn’t in compliance with federal vehicle safety standards and to promptly conduct a recall. GM admits in the agreement that it didn’t do so.
GM also agreed to provide NHTSA with access to the results of its internal investigation on the recall, to take steps to ensure its employees report safety concerns to management, and to speed up the process for GM to decide whether to recall vehicles.
The agreement also requires GM to notify NHTSA of changes to its schedule for completing production of repair parts by October 4. GM must also take steps to maximize the number of vehicle owners who bring in their vehicles for repair, including targeted outreach to non-English speakers, maintaining up-to-date information on its website, and informing vehicle owners through the media.
“We have learned a great deal from this recall,” said GM CEO Mary Barra. “We will now focus on the goal of becoming an industry leader in safety. We will emerge from this situation a stronger company.”
In 2007 and 2010, NHTSA reviewed data related to the non-deployment of airbags in some Chevy Cobalt models but each time, determined that it lacked the data necessary to open an investigation, the agency said.
However, on Feb. 7, GM announced it would recall some model vehicles for a defect where the vehicle's ignition switch may unintentionally move out of the "run" position that could result in the air bag not deploying if a crash occurred. GM didn’t advise NHTSA of this defect at the time of the agency's earlier reviews, the agency said.
After review by NHTSA, GM twice expanded the recall to include a total of 2,190,934 vehicles in the United States. The GM recall covers the 2005-2010 Chevrolet Cobalt, 2007-2010 Pontiac G5, 2003-2007 Saturn Ion, 2006-2011 Chevrolet HHR, 2006-2010 Pontiac Solstice, and 2007-2010 Saturn Sky vehicles.
At least 13 deaths have been have been linked to the faulty ignition switches.
In addition to the $35 million fine, GM faces the possibility of fines stemming from a criminal investigation by the Justice Department, like the one that was brought against Toyota for concealing safety defects, a New York Times article said. In that case, settled this year, Toyota paid a $1.2 billion settlement.
In addition, GM is facing investigations from House and Senate subcommittees, a group of state attorneys general, and the Securities and Exchange Commission, the article said. Hundreds of private claims and lawsuits also have been filed against the company.
- Read the agreement.
- Read NHTSA timeliness query on 2014 GM recall of ignition switches.
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