By Jennifer Geiger on May 16, 2014
GM will pay a record $35 million civil penalty for failing to report its ignition switch defect to the federal government in a timely manner; the defect led to a recall that affects more than 2.2 million vehicles in the U.S. Under federal law, automakers have five days to notify the government of a safety defect. According to the National Highway Traffic Safety Administration, it's the highest civil penalty amount ever paid due to a government recall investigation.
"GM did not act and did not alert us in a timely manner," U.S. Transportation Secretary Anthony Foxx said today in a press conference. "What GM did was break the law."
Aside from the fine, GM also signed a consent order that holds the automaker accountable for ensuring that replacement parts are made available quickly and recalled vehicles are repaired promptly. GM also agreed to make changes to its review of vehicle defects and give NHTSA full access to the automaker's internal defect investigations. The automaker recently appointed Jeff Boyer as its Global Vehicle Safety vice president and says it is already working with NHTSA to review recall processes and polices.
While $35 million is a record sum, the stakes could be about to get higher. Foxx said today's announcement should be a wakeup call to all automakers that they will be held accountable for failing to report safety issues in a timely manner. "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," he said.
During the last five years, NHTSA has obtained fines of $124.5 million from automakers that have failed to promptly report defects to the agency, including a $17.4 million fine from Toyota for its floormat-related unintended acceleration recall.
"We have learned a great deal from this recall. We will now focus on the goal of becoming an industry leader in safety. We will emerge from this situation a stronger company," GM CEO Mary Barra said in a statement. In April, Barra testified before a U.S. House of Representatives subcommittee regarding the ignition switch recall that has been blamed for at least 31 crashes and 13 deaths.
Assistant Managing Editor Jennifer Geiger is a reviewer, car-seat technician and mom of three. She wears a lot of hats, many of them while driving a minivan. Email Jennifer