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GM to pay $35 million penalty for slow response to ignition danger

Government requires wide-ranging changes at automaker

Last updated: May 16, 2014 12:00 PM

Chevrolet Cobalt key

General Motors will pay a record $35 million civil penalty and submit to “unprecedented” oversight requirements in response to the automaker’s failure to report a car safety problem to the federal government in a timely manner.

The announcement stems from an investigation by the National Highway Traffic Safety Administration (NHTSA), which is calling on GM to make “wide-ranging internal changes” to ensure this does not happen again.  

“Safety is our top priority, and today’s announcement puts all manufacturers on notice that they will be held accountable if they fail to quickly report and address safety-related defects,” said U.S. Transportation Secretary Foxx. “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.”

Consumers Union, the advocacy and policy arm of Consumer Reports, supports the call for greater penalties. Further, Consumers Union also feels the Early Warning Reporting System Improvement Act of 2014 would improve the transparency and quality of the information that goes into the National Highway Traffic Safety Administration’s (NHTSA) Early Warning Reporting Database, as well its SaferCar.gov database. (Read: "GM recall raises concerns about warning systems for auto safety.")

Automakers are required by federal law to notify NHTSA within five business days of determining a safety defect exists or that a vehicle does not comply with federal standards. GM admits that in the case of ignition switch problems on its small cars, that it did not do so.

With this consent order, GM is required to notify NHTSA of its schedule for replacement parts to correct the risks with 2005 to 2007 Chevrolet Cobalts (and their equivalents, the Pontiac G5 and Canadian Pontiac Pursuit), 2006-07 Chevrolet HHRsPontiac Solstices and Saturn Skys, and the 2003-2007 Saturn Ion.  

GM is also tasked with maximizing the number of vehicles brought in for repair, including multi-lingual outreach, online information, and media engagement.

NHTSA had twice reviewed data related to the non-deployment of air bags in certain, related GM models (2007, 2010), and each time concluded that it did not have enough information to open a formal investigation. In February, 2014, GM announced it would recall the models cited above for the risk that the ignition switch may move out of the “run” position, thereby shutting off the car and with it, the air bags and power assist for steering and braking.  

GM said the ignition switch doesn’t adhere to the company’s own torque specifications for the force required to hold it in position. The problem is caused by heavy key rings or by jarring driving on or off-road—such as an accident.

Jeff Bartlett

   

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