General Motors has agreed to a $35-million fine levied by the National Highway Traffic Safety Administration following its delayed reporting of the deadly ignition switch problem that has affected millions of the company's vehicles.

GM will be subject to what NHTSA called "unprecedented oversight" to prevent future lapses in recall reporting. The company admitted its failure to notify federal authorities of the safety problem in a timely manner in a consent form today, acknowledging that it broke the law. According to NHTSA, the consent form requires GM to provide the government regulator unfettered access to its internal investigation into the recall. It also sets a deadline for completing repairs – October 4 – and provides for future fines should GM not report additional recalls accordingly.

As part of this oversight process, GM has created what it's calling a Global Product Integrity unit and is "encouraging and empowering" employees to speak up when it comes to safety issues. Failure to report issues will lead to additional fines, says NHTSA.

"We have learned a great deal from this recall. We will now focus on the goal of becoming an industry leader in safety," said CEO Mary Barra in an official statement. "We will emerge from this situation a stronger company."

"Safety is our top priority, and today's announcement puts all manufacturers on notice that they will be held accountable if they fail to quickly report and address safety-related defects," said Secretary of Transportation Anthony Foxx. "No excuse, process, or organizational structure will be allowed to stand in the way of any company meeting their obligation to quickly find and fix safety issues in a vehicle," added interim NHTSA Administrator David Friedman in a statement.

Scroll down for the official press release from both General Motors and the National Highway Traffic Safety Administration.
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GM Signs Consent Order with National Highway Traffic Safety Administration

DETROIT – General Motors Co. (NYSE: GM) has come to an agreement with the National Highway Traffic Safety Administration (NHTSA) for failing to report in a timely manner the ignition switch defect. As part of this agreement, GM will pay a $35 million fine.

"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."

Working with NHTSA, GM 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, who is assigned to integrate safety policies across the company. "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."

Having signed this agreement, GM now has its sights set on effectively serving customers and completing the ignition switch recall.

"GM's ultimate goal is to create an exemplary process and produce the safest cars for our customers – they deserve no less," said Barra.

About General Motors Co.
General Motors Co. (NYSE:GM, TSX: GMM) and its partners produce vehicles in 30 countries, and the company has leadership positions in the world's largest and fastest-growing automotive markets. GM, its subsidiaries and joint venture entities sell vehicles under the Chevrolet, Cadillac, Baojun, Buick, GMC, Holden, Jiefang, Opel, Vauxhall and Wuling brands. More information on the company and its subsidiaries, including OnStar, a global leader in vehicle safety, security and information services, can be found at http://www.gm.com.

General Motors agrees to pay maximum $35 million penalty for violating federal safety laws in Chevrolet Cobalt investigation

WASHINGTON – The U.S. Department of Transportation's National Highway Traffic Safety Administration (NHTSA) today announced that General Motors (GM) has agreed to pay a record $35 million civil penalty and to take part in unprecedented oversight requirements as a result of findings from NHTSA's timeliness investigation regarding the Chevrolet Cobalt and the automaker's failure to report a safety defect in the vehicle to the federal government in a timely manner. The defect resulted in the non-deployment of airbags in certain Chevrolet Cobalt and other GM models. This action represents the single highest civil penalty amount ever paid as a result of a NHTSA investigation of violations stemming from a recall.

As part of today's agreement, set forth in a Consent Order signed with NHTSA, the agency also ordered GM to make significant and wide-ranging internal changes to its review of safety-related issues in the United States, and to improve its ability to take into account the 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.

"Safety is our top priority, and today's announcement puts all manufacturers on notice that they will be held accountable if they fail to quickly report and address safety-related defects," said U.S. Transportation Secretary Foxx. "While we will continue to aggressively monitor GM's efforts in this case, we also urge Congress to support our GROW AMERICA Act, which would increase the penalties we could levy in cases like this from $35 million to $300 million, sending an even stronger message that delays will not be tolerated."

Federal law requires all auto manufacturers to notify NHTSA within five business days of determining that a safety-related defect exists or that a vehicle is not in compliance with federal motor vehicle safety standards and to promptly conduct a recall. GM admits in the Consent Order that it did not do so.

Today's action is historic in that the provisions of the Consent Order will be immediately enforceable in federal court if GM does not fully comply. The Consent Order will hold GM accountable, push the automaker to make needed institutional change, and ensure that replacement parts are produced quickly and recalled vehicles are repaired promptly.

"No excuse, process, or organizational structure will be allowed to stand in the way of any company meeting their obligation to quickly find and fix safety issues in a vehicle," said NHTSA Acting Administrator David Friedman. "It's critical to the safety of the driving public that manufacturers promptly report and remedy safety-related defects that have the potential to lead to deaths or injuries on our nation's highways."

In the Consent Order, GM agreed to provide NHTSA with full access to the results of GM's internal investigation into this recall, to take steps to ensure its employees report safety-related concerns to management, and to speed up the process for GM to decide 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 October 4. GM must also take steps to maximize the number of vehicle owners who bring in their vehicles for repair, including targeted outreach to non-English speakers, maintaining up-to-date information on its website, and engaging with vehicle owners through the media. The Consent Order requires GM to submit reports and meet with NHTSA so that the agency may monitor the progress of GM's recall and other actions required by the consent order.

Both in 2007 and again in 2010, NHTSA reviewed data related to the non-deployment of airbags in certain Chevy Cobalt models but each time, determined that it lacked the data necessary to open a formal investigation. However, on February 7, 2014, GM announced it would recall certain model vehicles for a defect where the vehicle's ignition switch may unintentionally move out of the "run" position that could result in the air bag not deploying in the event of a crash. GM had failed to advise NHTSA of this defect at the time of the agency's earlier reviews.

After review and consultation by NHTSA, GM twice expanded the recall to include a total of 2,190,934 vehicles in the United States. The GM 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.

Over the past ten years, NHTSA defect investigations resulted in 1,299 recalls involving more than 95 million vehicles and items of motor vehicle equipment, which has helped the agency to reduce vehicle fatalities to historic, all-time lows. Including today's consent order, the agency has obtained record fines of $124.5 million in the last five years from automakers who have failed to promptly report defects to NHTSA.


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  • 31 Comments
      mmarcella87
      • 7 Months Ago
      not justice.
      Revis Goodworth
      • 7 Months Ago
      Government protecting Government Motors - should have been a total confiscation of the unpaid bailout funds that Government Motors is in possession of and that Government Motors stole through deception like the recalls, the VaporVolt last minute change, and continued badge-engineering and pricing gimmicks that was the downfall of GM - plus an entire lineup of vehicles that is barely competitive and never class best.
      BillyM67
      • 7 Months Ago
      So GM is fined $35M for lying for 10 years and killing at least 15 people, but Toyota was fined $1.5B for lying for a couple of years and killing a couple of people....bet someone is pretty pissed off in Japan this morning.
        Karfreek
        • 7 Months Ago
        @BillyM67
        Toyota "only" paid $17.35 Million to the NHTSA for the unintened acceleration issue. Which was the maximum at the time. GM is paying the Maximum to the NHTSA. Toyotas $1.2Billion penalty was to the US Attorneys office. GM has yet to be issued a fine from them. http://www.nhtsa.gov/About+NHTSA/Press+Releases/2012/Toyota+Motor+Corp.+Will+Pay+Record+$17.35+Million+in+Civil+Penalties+for+Alleged+Violations+of+Federal+Law
        hingle_mckringleberry
        • 7 Months Ago
        @BillyM67
        Agreed. Anyone who down voted that is probably working for GM. GM acknowledged that they broke the law. What I want to know is if this is punishable by jail time or something a lot more severe than $35 million. It should at least be $35 million for each year they failed to report the problem.
      flammablewater
      • 7 Months Ago
      Fine them all the money that was lost in the bailout.
      Larry Litmanen
      • 7 Months Ago
      Slap on the wrist, this is just want top 10 execs would get as a Christmas Bonus for one year.
      Arizonarelax
      • 7 Months Ago
      The US Attorneys office will not come close to placing a fine against GM as they did Toyota. It is to political. And that is very sad as this is as criminal as it gets. Reading elsewhere people/ large groups are selling off off GM stock. What a slap in the face to the American tax payer who bailed GM out. What an embarrassment. For those GM employees who give a crap about the company you work for I have a great deal of respect for you. Your management teams need ethics and integrity training. Enough of their grade school antics. How many more lies from are leaders and elected officials can the American public stand? What happen to America that held these people accountable? And just as importantly- I hope the US Attorneys office grows a pair and goes after past management as well and places their tail-ends in jail and do so with as much respect as they deserve. Oh yea, that would be NONE!
        no1bondfan
        • 7 Months Ago
        @Arizonarelax
        Great comment, only I would change one thing: GM management has not engaged in "grade school antics". These are business school antics, the same garbage mentality that describes employees as "Units of Labor", offshores jobs, cuts corners and kills long-term brand equity for the sake of quarterly growth, and worships at the altar of short-term "shareholder value" with total disregard for all other stakeholders. "Greed is good", brought to you by the MBAs, courtesy of the baby boomer generation. This crap didn't occur in a vacuum.
      zoom_zoom_zoom
      • 7 Months Ago
      So who is going to be prosecuted and imprisoned over causing the deaths of all those innocent people?
        no1bondfan
        • 7 Months Ago
        @zoom_zoom_zoom
        Sadly, nobody. Don't you know that the higher up the totem pole you go, the greater the crimes that are legal? Look at HSBC - those guys literally laundered money for the drug cartels and nobody there went to jail. Without enough money, anything is legal. Man, I'm getting cynical.
      owen brown
      • 7 Months Ago
      A slap on the wrist for GM and a slap in the face of tax payers for sure.
      Louis MacKenzie
      • 7 Months Ago
      GM doesn't need Global Product Integrity Unit, GM need CEO and Executives Integrity Unit. Instead of a measly fine for a few million dollars, put the former CEOs and executives in jail.
      Avinash Machado
      • 7 Months Ago
      So the wealthy are above the law.
      Sanchez
      • 7 Months Ago
      Cool, that's 0.35% of the loss on the bailout!
      Bill Burke
      • 7 Months Ago
      I think, for the first time really, GM is in serious trouble. Pending recalls in the millions, government fines, potential billions in legal case awards and eroding confidence in their products, could destroy GM as it now exists. With Ford and Chrysler riding high on quality new product, GM will likely relinquish there place in American manufacturers to both in short order. Will the government bail them out again ? Not the current structure, certainly there will be a downsized shadow of the old GM. Too bad, but too many problems and too weak a product portfolio this time to save the day.
        jcnspots
        • 7 Months Ago
        @Bill Burke
        I fully expect to see, within the next 5-10 years, GM going the way of AMC (bought out by another automaker and discarded), Volvo (bought out by a Chinese firm but still in business) or Saab (bankrupt and shuttered). and as an HHR owner I can't say as I will be surprised or even terribly disappointed. They brought their situation on themselves at GM.
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