General Motors Agrees To Pay $35 Million Penalty For Violating Safety Laws

WASHINGTON, D.C. — (Mealey's) The U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) announced May 16 that General Motors (GM) has agreed to pay a record $35 million civil penalty and to take part in oversight procedures as a result of the company’s failure to report a safety defect in its vehicles to the federal government in a timely manner prior to a massive product recall. 

GM announced earlier this year that it was recalling more than 2.6 million vehicles to correct a condition with ignition switches that may allow the key to unintentionally move or switch to the “accessory” or “off” position, turning off the engine and most of the electrical components on the vehicle.  

The company issued recalls for Chevrolet Cobalt, Pontiac G5, Pontiac Pursuit, Saturn Ion, Chevrolet HHR, Pontiac Solstice and Saturn Sky models.  

Ignition Switch 

The ignition switch defect resulted in multiple dangerous problems, including the nondeployment of airbags in GM vehicles.  

The $35 million fine represents the highest civil penalty amount ever paid as a result of a NHTSA investigation of violations stemming from a recall, the administration said in a press release. 

The NHTSA also ordered GM to make significant internal changes to its review of safety-related issues in the United States and to improve its ability to take into account the possible consequences of potential safety-related defects. 

Federal Law 

Federal law requires all auto manufacturers to notify NHTSA within five business days of determining that a safety-related defect exists or that a vehicle is not in compliance with federal motor vehicle safety standards and to promptly conduct a recall.  GM admits that it did not do so with the ignition switch problem, NHTSA noted. 

GM is now required to notify NHTSA of changes to its schedule for completing production of ignition switch repair parts by Oct. 4.  GM must also take steps to maximize the number of vehicle owners who bring in their vehicles for repair, including conducting targeted outreach to non-English-speaking owners, maintaining up-to-date information on its website and engaging with vehicle owners through the media.  NHTSA will monitor the progress of GM’s recall and other actions.

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