Transportation Secretary Anthony Foxx said today that GM broke the law, failing to inform NHTSA of the problem with its ignition switch on 2.6 million vehicles. The maker was fined the maximum allowed: $35 million.
There will not be another repeat of the General Motors ignition switch debacle.
That’s the message that officials at the Department of Transportation and the National Highway Traffic Safety Administration put forth today in announcing it fined GM $35 million – the maximum allowed – and secured ongoing oversight of the automaker’s efforts to rectify the defect with the switch.
“We know no one is perfect. But we cannot tolerate, what we will not accept, is that a person or a company who knows danger exists and says nothing. Literally, silence can kill,” said U.S. Secretary of Transportation Anthony Foxx during a press conference today.
“The fact remains that GM did not act, and did not alert us in a timely manner. What GM did was break the law. They failed to meet their public safety obligations.”
The agency said GM knew it had a problem in 2009 based on several documents it reviewed in its current investigation. Perhaps the most damning evidence against GM was a 2008 presentation that told GM employees to be factual but “not fantastic” in writing about problems. They also were instructed to not use the words “defect,” “dangerous” and “safety related.”
GM agreed to give the government unprecedented access for the next three years as it continues its investigation, noting that federal investigators will be in GM facilities and GM employees will come to Washington D.C. on a regular basis.
“We have learned a great deal from this recall. We will now focus on the goal of becoming an industry leader in safety,” said GM CEO Mary Barra in a statement. “We will emerge from this situation a stronger company.”
David Friedman, NHTSA’s acting administrator, noted that if information GM provided the agency in February had been made available earlier some owners of the vehicles may have avoided injury or death.
Friedman said there wasn’t one particular reason why GM didn’t act sooner even though there were plenty of employees as well as suppliers that knew there was a problem with the ignition in the vehicles. He said there was no indication that Barra had been briefed about the problem before the January meeting she referenced in testimony in two congressional hearings in early April.
(GM smacked with record $35 million fine. For more, Click Here.)
“The fact that GM took so long to report the defect says there was something wrong with the company’s values,” he said. “It is hard to point to one single fault in the system. Their process was broken and they need to fix it.”
He noted that the company is changing and NHTSA will work to ensure they continue to put the safety of its customers first. GM is empowering employees to point out safety concerns, he said. As part of the consent decree, if GM has concerns about a possible defect or safety issue, it must share that information with NHTSA immediately or be subject to additional fines.
The automaker seems to be getting the message. GM issued six more recalls during just the past two days, five of them yesterday covering a total of 2.7 million vehicles for problems ranging from failing brake lamps and headlights to a loss of steering on full-size trucks.
(Click Here for details on GM’s recall of 2.7 million vehicles.)
Friday’s smaller recall impacted just 8,200 vehicles. In all, GM has now recalled 11.5 million vehicles since the beginning of 2014, more than at any time in its history — and more than half of the total industry recall count for all of 2013.
In a separate announcement on Friday, the automaker noted that it is unlikely to get all of the defective ignition switches replaced by the October timeline it initially laid out. The supplier of the switch, Delphi Corp., has one line running seven days a week right now and is in the process of setting up two more lines to meet the demand.
(To see how the consent decree may help GM move past crisis, Click Here.)
However, the automaker has issued so many recalls this year, it’s taxing the entire infrastructure used to make the fixes: parts can only be made so quickly, dealers can only perform the repairs at a certain pace that it’s impossible to get the ignition switch repairs completed in time.
Aside from the fines and additional recalls, the automaker is also subject to investigations by the Justice Department, two congressional committees and the Transportation Department’s inspector general regarding the GM recall.