The Canadian Press - ONLINE EDITION

'Silence can kill': GM is fined a record $35 million for not disclosing deadly ignition defect

  • Print

WASHINGTON - Federal safety regulators slapped General Motors with a record $35 million fine Friday for taking more than a decade to disclose an ignition-switch defect in millions of cars that has been linked to at least 13 deaths.

Under an agreement with the Transportation Department, GM admitted it was slow to inform regulators, promised to report problems faster and submitted to more in-depth government oversight of its safety operations.

The fine was the maximum the department can impose.

"Literally, silence can kill," Transportation Secretary Anthony Foxx said, adding: "GM did not act and did not alert us in a timely manner. What GM did was break the law."

Safety advocates said the fine, which is less than a day's revenue for GM, is too small to deter bad behaviour by automakers.

Clarence Ditlow, executive director of the non-profit Center for Auto Safety, said the Justice Department — which is conducting a parallel criminal investigation — should fine the company $1 billion or more and bring charges against GM engineers and their superiors.

"That's the only way you're going to change GM's behaviour," he said.

Congress is also investigating GM, and the automaker faces hundreds of lawsuits over deaths and injuries attributed to the ignition switch.

The company has acknowledged knowing that the switches in its small cars had problems since at least 2001. But it was not until February that it began recalling 2.6 million of the cars, mainly Chevrolet Cobalts and Saturn Ions.

Automakers are required by federal law to report safety defects to the government within five days of discovering them.

When jostled, the ignition switches can slip out of the "run" position and shut off the engine. That cuts off the power steering and brakes, potentially causing drivers to lose control. It also disables the air bags.

GM says at least 13 people have died in crashes linked to the problem. Lawyers suing the company say the death toll is at least 53.

The Transportation Department's National Highway Traffic Safety Administration, which has been criticized for failing to take action on the switches despite thousands of complaints from car owners, used a news conference to turn the tables on GM, detailing some of the most damning evidence against the automaker.

Acting NHTSA Administrator David Friedman said a 2009 memo from a parts supplier to GM stated that the switch problem could disable the cars' air bags. Had the government been told that at the time, it would have sought a recall, Friedman said.

Friedman said it was clear many GM employees knew about the bad switch years ago, from engineers to executives. But he said the agency has no records to contradict CEO Mary Barra's claim that she found out about it only recently.

He portrayed the scandal as part of a larger problem with the safety culture at GM, saying the automaker's training materials discouraged employees from using words like "defect" or "dangerous" when reporting trouble up the chain of command.

"The fact that GM took so long to report this defect says there was something very wrong with the company's values," Friedman said.

GM received a $49.5 billion bailout from Washington during its 2009 bankruptcy, and the government was once the automaker's majority shareholder, but it sold off the last of its GM stock in December.

GM stock closed Friday down just 36 cents, or 1 per cent, at $34.

GM is already making changes. It has named a new safety chief and has begun checking records for problems that could lead to recalls. So far this year the automaker has issued 24 recalls totalling 11.2 million cars and trucks.

"We have learned a great deal from this recall. We will now focus on the goal of becoming an industry leader in safety," Barra said.

Earlier this year, after a four-year criminal investigation, the Justice Department made Toyota pay $1.2 billion for concealing unintended acceleration problems from NHTSA. No individuals were charged with a crime.

While the maximum fine that the Transportation Department can impose was doubled to $35 million this year, Foxx urged Congress on Friday to raise it to $300 million.

Even though GM's bankruptcy shields it from some past liability, the company has hired lawyer and compensation expert Kenneth Feinberg to negotiate settlements.

Carl Tobias, a law professor at the University of Richmond, said the government's action Friday "makes GM's exposure to liability greater, or the damages for which families ultimately settle larger."

Under the agreement, GM has to give NHTSA full access to the results of an internal investigation being done for the company by a former federal prosecutor. It will probably be finished in about two weeks.

____

Auto Writer Dee-Ann Durbin contributed. She and Krisher reported from Detroit.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Stuart Murray announces musical RightsFest for CMHR opening weekend

View more like this

Photo Store Gallery

  • Goose sits in high grass near Marion Friday afternoon for cover -See Bryksa 30 Day goose challenge- Day 18 - May 25, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • May 22, 2012 - 120522  - Westminster United Church photographed Tuesday May 22, 2012 .  John Woods / Winnipeg Free Press

View More Gallery Photos

Poll

Should confessions extracted through Mr. Big police stings be admissible in court?

View Results

View Related Story

Ads by Google