WASHINGTON – GM agreed to pay a record $35 million penalty for failing to report a safety defect in a timely manner in the Chevrolet Cobalt and other models.
The defect resulted in the non-deployment of airbags in certain Chevrolet Cobalt and other GM models, according to the U.S. Department of Transportation’s National Highway Traffic Safety Administration.
As part of today’s agreement, the federal 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.
“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.”
GM will also pay additional civil penalties for failing to respond on time to the Traffic Safety Administration’s document demands during agency’s investigation.
The size of the penalty quickly came under fire from lawmakers and safety advocates, who criticized it as far too small, according to a report in the New York Times.
“A penalty of $35 million is a parking ticket in comparison the toll this defect has taken on the lives of America’s families,” Senator Edward J. Markey, Democrat of Massachusetts, said in a statement. A proposal before Congress, pushed by the safety agency, would raise the maximum penalty to $300 million.
Senator Richard Blumenthal, Democrat of Connecticut, also criticized the size of the fine, calling it “a pittance,” but added that new safety practices at G.M. were necessary. “Changes to G.M.s internal process of handling recall issues are vital in preventing future tragedies of this nature,” he told the New York Times.
Federal law requires all auto manufacturers to notify Traffic Safety Administration 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.
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.
Both in 2007 and again in 2010, the Traffic Safety Administration 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, 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 Traffic Safety Administration of this defect at the time of the agency’s earlier reviews.
After review and consultation by the Traffic Safety Administration , GM twice expanded the recall to include a total of 2,190,934 vehicles in the United States:
The GM recall covers the following vehicles:
- 2005-2010 Chevrolet Cobalt
- 2007-2010 Pontiac G5
- 2003-2007 Saturn Ion
- 2006-2011 Chevrolet HHR
- 2006-2010 Pontiac Solstice
- 2007-2010 Saturn Sky vehicles.
Over the past ten years, the Traffic Safety Administration 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 agency.