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| GM fined $35 million in ignition-switch safety case | GM fined $35 million in ignition-switch safety case |
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| General Motors agreed Friday to pay a $35 million civil penalty over its slow action to address an ignition-switch flaw that has been linked to 13 deaths. | General Motors agreed Friday to pay a $35 million civil penalty over its slow action to address an ignition-switch flaw that has been linked to 13 deaths. |
| The amount is the single highest civil penalty amount ever paid as a result of an investigation into recall problems by the National Highway Traffic Safety Administration. | The amount is the single highest civil penalty amount ever paid as a result of an investigation into recall problems by the National Highway Traffic Safety Administration. |
| As part of the settlement, the nation’s largest automaker will also have to make “significant and wide-ranging” changes to how it reviews safety issues in the United States, said the Department of Transportation. The company has also agreed to “unprecedented oversight requirements” from the government. | |
| GM will also be required to pay additional civil penalties for not responding on time to demands from NHTSA for documents during the government’s investigation. | GM will also be required to pay additional civil penalties for not responding on time to demands from NHTSA for documents during the government’s investigation. |
| “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. | “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. |
| This year, the company issued recalls for 2.6 million Chevrolet Cobalts and other small cars equipped with ignition switches that can inadvertently switch to “accessory” position, causing the car to stall, disable air bags, and stiffen brakes and steering. | |
| GM acknowledged knowing about the problem for at least a decade before the recall, a delay that has triggered investigations by Congress, federal prosecutors and federal regulators. | GM acknowledged knowing about the problem for at least a decade before the recall, a delay that has triggered investigations by Congress, federal prosecutors and federal regulators. |
| In addition, both GM and its board have launched internal probes. | In addition, both GM and its board have launched internal probes. |
| The delayed recall was followed by a flurry of lawsuits from accident victims and their survivors. GM has hired mediation expert Kenneth Feinberg to explore establishing a compensation fund for victims. Meanwhile, the automaker is fighting suits from others, including shareholders and owners of recalled cars, who are claiming economic loss because of the ignition problem. | The delayed recall was followed by a flurry of lawsuits from accident victims and their survivors. GM has hired mediation expert Kenneth Feinberg to explore establishing a compensation fund for victims. Meanwhile, the automaker is fighting suits from others, including shareholders and owners of recalled cars, who are claiming economic loss because of the ignition problem. |
| The company has issued 24 recalls this year, and they are taking a financial toll. In the first quarter, GM set aside $1.3 billion to pay for the recalls. The automaker said Thursday that it would set aside an additional $200 million in the second quarter to cover recall costs. | |
| Related: | Related: |
| Here comes another huge round of recalls for GM | Here comes another huge round of recalls for GM |
| Why did GM take so long to respond to deadly defect? Corporate culture may hold answer. | Why did GM take so long to respond to deadly defect? Corporate culture may hold answer. |