Oversight from NHTSA is Major Part of GM Agreement
Last week, General Motors announced it had reached a settlement with the U.S. Department of Transportation regarding the delayed ignition recall. The agreement stipulated that GM would pay the maximum fine allowed by law – $35 million – and, perhaps more importantly, allows extensive oversight from the National Highway Traffic Safety Administration (NHTSA) over the next year, according to a Bloomberg report.
Details of the GM Agreement
The $35 million fine is a mere drop in the bucket for GM. Bloomberg notes the fine is equivalent to two hours’ worth of the automaker’s 2014 projected earnings. In addition to the fine, GM will have to comply with extensive oversight from NHTSA including:
- Jeff Boyer, GM’s vice president of global vehicle safety, will meet on a monthly basis with NHTSA to review company changes.
- Changes to organizational structure will be reviewed with NHTSA, and GM will “promptly respond” to feedback.
- For a minimum of a year, GM and NHTSA will meet monthly to discuss non-public technical service bulletins, warranty claims, and field reports which might indicate safety defects.
- GM will no longer train employees to use wording that dilutes the urgency of potential safety defects.
Critics of the Agreement
The GM agreement is not without its critics. Attorney Robert Hilliard called the agreement “just a show.” Hilliard is part of the team of lawyers assembled by Thomas J. Henry that is representing families and victims affected by the GM recall. In an interview, Hilliard said of the agreement, “It was taking GM to an artificial woodshed and pretending as if GM will now become responsible.”
Safety advocates also have their doubts about the agreement. Clarence Ditlow, executive director for the Center for Auto Safety questioned whether or not NHTSA had the resources to provide such oversight.
Victims Seeking Compensation
In the meantime, victims and their families are still seeking compensation for injuries and lives lost in accidents involving the recalled vehicles. In April, GM announced the hiring of attorney Ken Feinberg to examine options for establishing a GM compensation fund.
Publicly, GM has acknowledged 13 deaths linked to the faulty switches that cause engine stalls, brake failures, and airbag failures. Safety advocates and victims’ claims, however, suggest that number is much higher.
AUTOMOBILE ACCIDENT RESULT
$1.8 MillionExpenses: $20,000.00 | Attorneys Fees: $765,000.00 | Net to Client: $1 Million
AUTOMOBILE ACCIDENT RESULTS
$2 MillionExpenses: $78,475.96 | Attorneys Fees: $850,087.96 | Net to Client: $1,071,436.00
AUTOMOBILE ACCIDENT RESULT
$2.3 MillionExpenses: $200,000.00 | Attorneys Fees: $900,000.00 | Net to Client: $1.2 Million