Goshen News, Goshen, IN

Business

May 16, 2014

GM fined $35M over deadly defect

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 allowed under the law.

"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 behavior by automakers.

Clarence Ditlow, executive director of the nonprofit Center for Auto Safety, said the Justice Department — which is conducting a 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 behavior," he said.

Congress is also investigating GM, and the automaker faces hundreds of lawsuits over deaths and injuries attributed to the bad 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. Trial lawyers suing the company say the death toll is at least 53.

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