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General Motors to Pay Maximum Fine for Ignition Recall

Tina Robinson2 years ago

Recently, General Motors announced a settlement reached with the U.S. Department of Transportation (DOT) and will pay the maximum allowable fine of $35 million, according to USA Today.

More about the GM Fine

The $35 million fine was assessed as part of a settlement between GM and the DOT in the inquiry into whether or not the automaker followed regulations when reporting an ignition switch defect. Under current law, automakers must report safety-related defects to the National Highway Traffic Safety Administration (NHTSA) within five days of their discovery.

On February 7, GM issued a recall for 619,122 of its 2005-2007 Chevrolet Cobalt and 2007 Pontiac G5 vehicles due to an ignition switch defect that could cause engine stalls, brake failure, airbag failure, and steering defects. That recall was expanded on Feb. 25 to included an additional 748,024 vehicles including the 2006-2007 Chevrolet HHR and Pontiac Solstice, and 2003-2007 Saturn Ion. As the recall was expanded twice more, the total number of recalled vehicles currently sits at about 2.6 million.

After an inquiry was launched into the recall, GM documents showed the company had been aware of problems with the faulty switches as far back as 2001. The delayed response has prompted two congressional probes, a Justice Department investigation and a multitude of legal action.

Additional Details of the GM Settlement

GM has also announced it will pay an additional fine for failing to meet the NHTSA deadline to submit requested information about the recall. The company was originally being fined $7000 per day for failing to act in a timely manner to that request. The company has also said it plans to make “significant” internal changes.

Possible GM Compensation Fund

Although GM has only acknowledged 13 deaths and just over 30 crashes linked to the defect, victims and safety advocates insist that number is much higher. In April, as part of testimony before a congressional panel, GM CEO Mary Barra announced the automaker had hired attorney Ken Feinberg. Mr. Feinberg has worked on high-profile victims’ compensation cases in the past and is expected to help GM explore its options for creating a similar fund for ignition recall victims.


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