GM fined $35 million for ignition switch defects

BY Joshua Barajas  May 16, 2014 at 12:50 PM EST
Its a gloomy day for General Motors, who has been fined $35 million for failing to quickly report defects in the ignition switches of 2.6 million cars. Photo by Flickr user Ahren

Following weeks of review, General Motors has been fined $35 million for failing to quickly report defects in the ignition switches of 2.6 million cars. Photo by Flickr user Ahren

May 16, 12:50 p.m. EDT | Updated General Motors will pay a $35 million civil penalty for its failure to report a ignition switch defect in 2.6 million Chevrolet Cobalts and other small cars, the Department of Transportation announced Friday.

The faulty ignition switch — linked to 13 deaths and 31 crashes– inadvertently caused cars to stall and disabled air bags. GM admitted that the company was aware of the problem more than 10 years ago, as early as November 2009, but failed to report the defect to the federal regulators in a timely manner. By law, automakers are required to report a safety issue to the National Highway Traffic Safety Administration within five business days, the department said.

“We know no one is perfect,” Transportation Secretary Anthony Foxx said in a news conference Friday, “but what we cannot tolerate, what we will never accept, is a person or company that knows dangers exists and says nothing — literally, silence can kill.”

GM was given the maximum penalty under the law as a result of a NHTSA investigation, but, as the Associated Press points out, the company makes much more in a day’s revenue, taking in $37.4 billion during the first quarter.

At the news conference, Foxx urged Congress to pass legislation that will raise the penalty from $35 million to $300 million.

The department’s agreement with GM also includes “unprecedented oversight requirements,” Foxx said, to change its safety culture to prevent future offenses.

On Thursday, GM recalled another 2.7 million cars, bringing the total of vehicles the automaker has recalled this year to more than 11.1 million in the U.S., The Washington Post reports. GM has issued 24 recalls this year.

GM CEO Mary Barra released a statement Friday, addressing the agreement.

“GM’s ultimate goal is to create an exemplary process and produce the safest cars for our customers — they deserve no less,” Barra said.