General Motors fined $35 million over faulty ignition switches

DETROIT (WXYZ) - Government watchdogs dropped the hammer on General Motors today, announcing a record-setting fine and new regulations designed to change the company’s culture. But even those same watchdogs admit, they wish they could do much more.

This is the first penalty for GM since the company announced the first of many recalls earlier this year. While the threat of criminal charges still looms, the company learned it needs to write a check.

“What GM did was break the law,” says Anthony Foxx, U.S. Transportation Secretary. “The nation’s largest automaker today agreed to the biggest fine allowed, a $35 million settlement stemming from General Motors’s failure to quickly report and fix problems in some 2.6 million vehicles with faulty ignition switches.”

The flaw allowed the switches to slip from on to off, disabling air bags and power steering.  At least 13 deaths have been linked to the ignition flaw, which GM knew about for at least 10 years, but only acknowledged this year.

“GM must rethink the corporate philosophy reflected in the documents we reviewed, including training materials that explicitly discouraged employees from using words like ‘defect,’ ‘dangerous,’ ‘safety related,’ said David Friedman, the head of National Highway and Transportation Safety Administration (NHTSA).  

While today’s $35 million fine is the biggest ever levied by the Department of Transportation, one senator called it a “parking ticket” for GM. He and others are pushing that future fines be upped to $300 million so as to send a much stronger message.

“You’re going to get caught, you’re going to get found out.  The question is, are you going to pay now to fix your vehicles…or are you going to pay later,” Friedman added.

In addition to the fine, the settlement also requires GM to take part in what the government calls "unprecedented oversight requirements,” like meeting with federal investigators each month for a year to go over new service bulletins, warranty claims and field reports, and GM will also provide a list of “every safety-related issue” they’re aware of until next June.

“What we will never accept is a person or company that knows danger exists and says nothing. Literally, silence can kill,” Foxx said.

NHTSA’s Administrator David Strickland said today that their investigation found that GM executives were aware of the ignition problem but never reported it. He also said there was no evidence that CEO Mary Barra was one of them. A number of separate criminal investigations are still ongoing.

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