Federal regulators recently imposed the biggest punishment they could on General Motors and condemned it over its failure to promptly report a defect that has been linked to 13 deaths. GM will pay a $35 million dollar penalty, which is the maximum allowed and the largest fine ever imposed on an automaker. GM will be required to make a wide range of changes to its safety practices that will be supervised by the government, which is another first for the automaker. David Friedman of the National Highway Traffic Safety Administration (NHTSA) stated that the investigation of GM found “deeply disturbing” evidence over how GM treated safety concerns. Friedman also cited an internal presentation from 2008 that was used to train employees to obscure some problems.
Under the consent order, GM must meet monthly with regulators for a year and provide a list of every safety regulated issue under consideration by the company. Along with making recall decisions more quickly, GM has also agreed to share information across its different units, improving the ability to identify safety issues. The government’s review of GM’s internal company documents show that GM has known since at least November 2009 that faulty ignition switches were prone to turn off, preventing the air bags from working. Red flags appeared over and over in the months following, but GM did not tell the government nor did they initiate until February of this year.
Besides the $35 million penalty, GM faces the possibility of fines stemming from a criminal investigation by the Justice Department, like the ones brought against Toyota for concealing safety defects. In that case, settled this year, Toyota had to pay $1.2 billion settlement. The investigation has failed to mention whether Mary Barra, GM’s chief executive knew about the problems before her congressional testimony in March.
Benny Agosto, Jr. is a partner at Abraham, Watkins, Nichols, Agosto, Aziz & Stogner in Houston, Texas. For over 65 years, Abraham Watkins has successfully represented injured people and families who fall victim to catastrophes. Our attorneys have the knowledge, experience and resources necessary to obtain just compensation their clients. For more information, please contact the office of Benny Agosto, Jr. at Abraham, Watkins, Nichols, Agosto, Aziz & Stogner, by letter at 800 Commerce Street, Houston, Texas 77002, or by phone at (713) 222-7211.