Breaking: GM Fined $35 Million For Safety Law Violations
Today, the United States Department of Transportation announced that GM will pay the maximum $35 million fine for violating federal safety laws in connection with the timeliness of their recall of 2.5 million vehicles with a potentially deadly ignition switch issue. It was also announced that GM will be required to make a number of sweeping internal changes to its review process regarding safety-related issues.
“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 Anthony Foxx in the DoT’s press release. “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.”
The DoT signed a consent order with the NHTSA that orders GM to pay “civil penalties” for failing to respond to NHTSA during the investigation of the ignition switch recall. GM admits in the Consent Order that it did not disclose in a timely fashion the defect that took at least 13 lives in vehicles whose airbags were disabled by faulty ignition switches.
GM also agrees to provide NHTSA with full access to all aspects of their internal investigation and to notify NHTSA of changes to the schedule for production of repair parts by an October 4 deadline. The Consent Order also demands that GM take steps to maximize outreach and ensure that all 2.5 million affected vehicles receive the necessary repairs. These steps include being transparent on their website, targeting non-English-speaking customers, and engaging GM customers through the media.
At a press conference, Foxx laid the blame squarely at the foot of GM and their refusal to act appropriately, going so far as to claim that GM broke the law. “We know no one is perfect,” said Foxx, “but what we cannot tolerate…is a person or company that knows danger exists, but says nothing.”
Foxx specified that the agreement discloses that GM had information about the defect since November 2009, which means that their act was tantamount to criminal negligent. Foxx also stated that the policy moving forward toward inaction will be “zero-tolerance,” and that steps will be taken to raise the maximum fine for automakers from $35 million to $300 million.
“Crashes happened, and people died. Had GM acted differently, perhaps some of this tragedy might have been averted.”
NHTSA Acting Administrator David Friedman called the details of their investigation “disturbing,” stating the GM “stood in the way” of facts and thereby allowed their customers to perish in unsafe cars. Friedman laid out a timeline of events that indicated that GM indeed knew of the ignition switch problem for as many as five years, yet did nothing to report the issue and even discouraged employees not to use terms like “defect” when referring to the problem.
Friedman says that the Consent Order will require GM to be transparent in their dealing with NHTSA going forward and empower employees to report wrongdoing. Friedman explained that today’s ruling should set the standard for all automakers moving forward in their handling of substantial safety issues.
“All manufacturers will be held accountable and will be held responsible,” Friedman said.
Update: The Consent Order has found its way online in .PDF form, and it includes slides from a 2008 Powerpoint presentation wherein GM employees are discouraged from using certain language when reporting problems. This includes deterring employees from using statements such as “This is a safety and security issue…” and “Dangerous…almost caused an accident” and terms such as “evil,” “cataclysmic,” “genocide,” and “apocalyptic.”
This slide states that internal documents should not use terms that are too specific or emotional. Because, after all, what better way to describe an issue that can kill people than “Kevorkianesque,” “Cobain,” or “rolling sarcophagus?”