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Proposed Bill Would Increase Auto Recall Fine to $300 Million

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Tina Robinson3 years ago

A recent bill proposed by the Obama administration would raise the maximum fine the National Highway Traffic Safety Administration (NHTSA) can impose on automakers who delay recalling unsafe vehicles, according to a recent Reuters report.

About the Proposed Bill

The proposed bill is a four-year, $302 billion legislation aimed solving an expected funding shortage of American’s transportation system. The bill also seeks increase the power NHTSA has over automotive safety. Most importantly, it would increase the maximum fine NHTSA can levy against automakers who fail to recall vehicles in a timely manner from $35 million to $300 million. Currently, automakers have five days from the time a defect is discovered to notify NHTSA.

Bill Follows GM Recall

The proposed bill comes as officials continue to investigate the GM ignition switch recall. Since February, about 2.6 million vehicles have been recalled due to faulty ignition switches that can cause a vehicle to suddenly lose power. The resulting sudden loss of power steering, power brakes and airbags can put drivers at extreme risk. GM has linked 13 deaths with the defect, although some estimates put the death toll as high as 303.

GM has been the subject of numerous lawsuits and federal investigations into why it took the automaker over a decade to recall the defective vehicles – mostly Chevrolet Cobalts and Saturn Ions – even though it knew about issue with the switches since at least 2004. If NHTSA decides that GM did not recall the vehicles in a timely manner the most the car manufacturer can be fined is current maximum penalty of $35 million.

Earlier this month amid mounting legal pressure, GM announced it had hired the services of attorney Kenneth Feinberg to explore options for a victims’ compensation fund for those affected by the ignition switch recall. Feinberg has worked in other high-profile cases such as the BP oil spill and 9/11 terrorist attacks. 


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