General Motors agreed to pay the government’s maximum fine of $35 million for waiting too long to recall 2.6 million cars with faulty ignition switches and to make “significant and wide-ranging internal changes” in its handling of future safety defects, the U.S. Department of Transportation said.
As part of a consent decree, GM admitted that it broke federal law with its handling of the recall, an acknowledgement that Toyota Motor Corp. did not make when it was fined in connection with its unintended acceleration recalls.
GM agreed to give regulators full access to the results of its internal investigation of the recall, to make changes ensuring that employees report safety defects to management and to “speed up” its recall decision-making process.
“Safety is our top priority, and this announcement puts all manufacturers on notice that they will be held accountable if they fail to quickly report and address safety-related defects,” Transportation Secretary Anthony Foxx said in a statement.
Federal law requires automakers to notify safety regulators within five days after determining that vehicles are defective. Documents filed by GM indicate that its engineers first encountered a problem with the switch in 2001 and studied the issue multiple times in 2004 and 2005 without issuing a recall or modifying the switch.
“We have learned a great deal from this recall. We will now focus on the goal of becoming an industry leader in safety,” GM CEO Mary Barra said in a statement issued by the company. “We will emerge from this situation a stronger company.”
The government called the consent decree “historic” because it is immediately enforceable in federal court.
It requires GM to notify the National Highway Traffic Safety Administration of any change to its anticipated production schedule for replacement ignition switches and to maximize the number of customers who take their vehicles to a dealership for repair by reaching out to non-English speakers, keeping information on its Web site updated and distributing information to owners through the media.
GM also has to periodically submit reports and meet with NHTSA officials so that the agency can monitor the recall progress and other actions.
NHTSA ordered Toyota to pay three fines totaling nearly $50 million in 2010 and 2012. The maximum fine has been increased to $35 million per incident since then, and Foxx again expressed support for raising it to as much as $300 million.