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GM Fined $35M for Recall Delays

May 16, 2014

General Motors has agreed to pay a $35 million fine to the National Highway Traffic Safety Administration (NHTSA) for failing to report in a timely manner the ignition switch defect, which has been linked to 13 deaths.

Confronted with the results of a NHTSA investigation into the matter, the automaker has also consented to a number of oversight requirements.

NHTSA said it has ordered GM to make wide-ranging internal changes to its review of safety-related issues in the U.S., and to improve its ability to assess possible consequences of potential safety-related defects. GM will also pay additional civil penalties for failing to respond on time to the agency’s document demands during NHTSA’s investigation.

“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. “We will emerge from this situation a stronger company.”

GM CEO Mary Barra
GM CEO Mary Barra

GM said it has already begun reviewing processes and policies to avoid future recalls of this nature.

“We are working hard to improve our ability to identify and respond to safety issues,” said Jeff Boyer, vice president of global vehicle safety. “Among other efforts, GM has created a new group, the Global Product Integrity unit, to innovate our safety oversight; we are encouraging and empowering our employees to raise their hands to address safety concerns through our Speak Up for Safety initiative, and we have set new requirements for our engineers to attain Black Belt certification through Design for Six Sigma.”

NHTSA said that in 2007 and again in 2010, the agency reviewed data related to the non-deployment of airbags in certain Chevy Cobalt models. But each time, NHTSA decided there was insufficient evidence to launch a formal investigation.

In February of this year, however, GM announced plans to recall the Cobalt and some other models for a defect that could cause the vehicle's ignition switch to unintentionally move out of the "run" position. As a result of this defect, the airbags could fail to deploy in the event of a crash.

GM hadn't advised NHTSA of this defect at the time of the earlier reviews, the agency said.

GM has twice expanded this recall to include a total of 2.19 million vehicles in the U.S. The ignition switch recall covers the 2005-2010 Chevrolet Cobalt, 2007-2010 Pontiac G5, 2003-2007 Saturn Ion, 2006-2011 Chevrolet HHR, 2006-2010 Pontiac Solstice and 2007-2010 Saturn Sky vehicles.

As part of the consent order agreement that GM signed, the automaker will provide NHTSA with full access to results of the company’s internal investigation into this recall. Also, GM will take steps to ensure employees report safety-related concerns to management, and to speed up the process for deciding whether to recall vehicles.

The consent order also requires GM to notify NHTSA of changes to its schedule for completing production of repair parts by Oct. 4. Moreover, GM must take measures to maximize the number of vehicle owners who bring in their vehicles for repair. That means reaching out to non-English speakers, maintaining up-to-date information on GM's website, and engaging with vehicle owners through the media, NHTSA said. The agency will monitor GM’s progress through reports and meetings.

For more information about the ignition switch recall, click here.

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