By on May 16, 2014

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The National Highway Traffic Safety Administration has spoken: General Motors will pay the maximum fine of $35 million for its decade-plus delay of the recall of 2.6 million vehicles affected by an out-of-spec ignition switch linked to over 30 accidents and 13 fatalities.

Automotive News reports that in GM’s consent decree with the NHTSA, it admitted to breaking federal law with its handling of the recall process over the part, and will give federal regulators full access to findings from its internal investigations over the matter.

In a statement, U.S. Secretary of Transportation Anthony Foxx proclaimed 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.” GM CEO Mary Barra added in a separate statement that her company has learned several lessons from the recall, lessons which will be applied toward its goal of “becoming an industry leader in safety.”

Additionally, GM must notify the NHTSA whenever it makes any change to its production schedule for replacement ignition switches, and to put forth a full effort to bring in the biggest number of affected consumers to its dealership network, including outreach through the Internet and to non-English speakers.

Finally, GM will also submit to periodic reviews with the agency in the latter’s monitoring of both the recall and other actions.

NHTSA consent order to GM

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33 Comments on “NHTSA Drops $35M Hammer On GM Over Delayed Recall...”


  • avatar
    mitchw

    If today’s fine is the maximum, imagine what’s going to be in the Valukas Report. Get ready for a late Friday afternoon news dump, rush editing job in the near future, Derek.

  • avatar
    SayMyName

    “Maximum” penalty or not, in the real world this amounts to little more than a reflex hammer to the knee. GM needs a bullet to its head.

  • avatar
    gtrslngr

    Good lord in heaven ! Will miracles never cease ? The Feds actually slapping GM upside the head with a [ somewhat ] serious fine rather than just slapping them on their wrists ? My goodness . What a week . I am truly amazed . Next thing you know the Feds will finally find the Ohio National Guard 38 guilty for Murder and Attempted Murder [ 5/4/1970 ] and Obama will start instating shovel ready projects to repair all the damaged Infrastructure across the US rather than throwing our money away down Rabbit Hole projects such as TESLA , EVs in general as well as SpaceX .

    What a week indeed ! What a long strange trip it still is .

    • 0 avatar
      Kenmore

      They let you wake up again?
      That’s really subpar care.

    • 0 avatar
      CJinSD

      https://autos.yahoo.com/blogs/motoramic/toyota-s–1-2-billion-fine–gm-recall-highlight-defects-in-u-s–auto-safety-164518294.html

      Toyota was hit with fines in the range of this one twice during their character assassination by the UAW lackeys in power. Then they had to pay 1.2 billion more dollars to the embarrassing gangsters running the country into the ground. Don’t forget that Toyota didn’t actually build unsafe cars either. Saying this fine proves anyone is ethical or sincere is naive in the extreme.

    • 0 avatar
      jetcal1

      Gtrslngr,
      Enjoy your crackling over GM, but bear in mind increased scrutiny almost always uncovers further defects/problems. Do honestly believe the firm where you work could pass the same level of investigation
      without any discrepancies? As an auditor, I promise you, anyone with some background in that industry could come in and if not shut down the company, make life very unpleasant for the senior officers.

    • 0 avatar
      Superdessucke

      No shovel ready project to fix infrastructure?? Huhhh? I can’t even drive to the 7-11 without running into the dreaded flashing yellow arrow and Obama’s Socialist People’s Construction Party, along with a 20 traffic jam as 10 of them are hard at work fixing a slightly uneven piece of pavement. Plenty of money being spent on roads these days.

  • avatar
    Tosh

    “GM CEO Mary Barra added in a separate statement that her company has learned several lessons from the recall, lessons which will be applied toward its goal of “becoming an industry leader in safety.”

    See, there’s a silver lining after all: they “learned several lessons.” Usually GM only learns one lesson at a time…

    • 0 avatar
      CJinSD

      http://jalopnik.com/kevorkianesque-macabre-phrases-gm-had-to-ban-from-vehi-1577458070/all

      They’re trying to learn how not to incriminate themselves in their internal correspondence.

  • avatar
    Z71_Silvy

    $35 million for not issuing a recall for a complete NON ISSUE!

    43 incidents out of over 3,000,000 vehicles. A .00001 chance of anything happening.

    People should be hung for making this what it has become. Its criminal how this has been allowed to explode into something this big.

    Our media is disgusting.

    • 0 avatar
      sirwired

      43 incidents that we know about. Not every accident caused by a safety issue is even noticed, much less reported into the NHTSA or the manufacturer.

      It’s pretty safe to assume there are plenty of incidents (even accidents) that we don’t know about.

      • 0 avatar
        Z71_Silvy

        The law really doesn’t deal with assumptions. It deals with what can be proven.

        What can be proven is 43 incidents. A number so laughably low that if someone told me what GM would be dealing with prior to now, I would have said they were crazy.

        And it still doesn’t change the fact that all of this hoopla was caused by 43 incidents….or 0.00001 of the vehicles sold.

        • 0 avatar
          NormSV650

          Just incidents? Toyota had 37 deaths from unintended acceleration.

          http://en.wikipedia.org/w/index.php?title=2009%E2%80%9311_Toyota_vehicle_recalls

    • 0 avatar
      wsn

      The Toyota un-intended acceleration only has one confirmed incident, which is cause by a dealer (not Toyota the manufacture) installed floor mat.

  • avatar
    sirwired

    $35M is a stupidly low fine. It’s not even in the same ballpark as even the most basic suitable fine. The current DoT Value of a Statistical Live (VSL, which is used to evaluate cost-benefit analysis for safety rules) is $9.1M. It seems to make sense to fine them for at least that amount for all recorded fatalities from this defect. And toss in some more for fatalities that haven’t occurred yet or unrecorded. And toss in some more for not taking care of this sooner.

    Keeping the fine well below the VSL explicitly sends the message that it’s cheaper just to leave defects in than to fix them in fear of government wrath.

  • avatar
    CapVandal

    As I recall, Toyota settled a Department of Justice criminal complaint for a billion or so.

    And, this is just the maximum NHTSA fine.

    If the DOJ continues a criminal probe — settlement will cost GM 10 to 30 times more and enough to wipe out a material chunk of a quarter’s earnings.

    It seems reasonable to me. GM will still end up paying a couple of million per death and a lot for serious injuries. Plus the publicity and the recalls are costing a billion or so.

    And, if it is criminal — they will pay a lot more.

    This is America, after all. Due process and rough justice.

  • avatar
    Crosley

    So a little less than $14 per car. What a joke.

  • avatar
    50merc

    Any word yet on why GM stopped using the 2004-and-earlier switch that apparently was trouble-free?

  • avatar
    VenomV12

    As someone who has personally seen how a major automaker treats their customers badly and ignores or does not handle a potentially dangerous situation correctly, I think the fines should be $350 million. Better yet, do like China and arrest or execute the people in charge, bet these issues would drastically drop.

    I really feel disgusted that I went to bat for GM during the bailout and argued for their survival, they should have been left to die like they deserved.

    • 0 avatar
      challenger2012

      @Venom12 What you describe is how the Big 3 looked upon cars years ago. Cars were what pussies drove. The Big 3 could not have cared any less. I am here to tell you, if the issue were with pick-up trucks, it would have been resolved ASAP.

      GM, Ford and Chrysler are not the same companies they were 10 years ago. For example: look at the cars they all make, some are world class i.e. Ford Fusion, Chevy Impala and GM SUV’s and Trucks are among the best, heck Ford’s, GM’s and Chrysler’s Trucks are all good. How many people reading these words would choose a Nissan Titian over any Big 3 truck?

      The past wrongs have to be righted, but all of the Big 3 are headed in the right direction.

  • avatar
    Lorenzo

    GM is avoiding personal lawsuits by claiming it’s “old” GM’s problem, why didn’t they claim the same thing with the NHTSA? I suspect this consent decree was privately negotiated, with GM using it to put the issue behind it at minimal cost, while the “government” distances itself from the term “government motors”. It’s a win-win deal.

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