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General Motors To Pay $35M Fine For Recall Debacle

General Motors today signed a consent order with the National Highway Traffic Safety Administration (NHTSA) for failing to report defective ignition switches in a timely manner. Part of the agreement includes paying a $35 million fine.

“We have learned a great deal from this recall. We will now focus on the goal of becoming an industry leader in safety. We will emerge from this situation a stronger company,” said General Motors CEO Mary Barra. Barra claims she didn’t know about the issue until January 2014.

Since the controversy started, including Federal hearings and multiple lawsuits, General Motors has been working with NHTSA to revamp its reviewing processes and policies to avoid future missed opportunities for recalls.

“We are working hard to improve our ability to identify and respond to safety issues,” said vice president of Global Vehicle Safety, Jeff Boyer, who is assigned to integrate safety policies across the General Motors. “Among other efforts, GM has created a new group, the Global Product Integrity unit, to innovate our safety oversight; we are encouraging and empowering our employees to raise their hands to address safety concerns through our Speak Up for Safety initiative, and we have set new requirements for our engineers to attain Black Belt certification through Design for Six Sigma.”

With the agreement now signed, General Motors continues to complete the ignition switch recall, which involves the production of over two million switch mechanisms through October.

“GM’s ultimate goal is to create an exemplary process and produce the safest cars for our customers – they deserve no less,” said Barra.

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Comments

  1. Wow, Mary and the feds sure got to the bottom of things real quick; wrapped things up nice and tidy. GM pays a little hush money, the feds step up to the plate, talk about how they’re gonna make the world a safer place (deflect blame), and the victims’ families get brushed off the front pages. Institutional investors rejoice!

    Move along folks, nothing to see here.

    Reply
    1. Actually it is nowhere from over. Congress/NHTSA and everyone else is waiting for the completion of the internal study done by an outside investigator who has been given full access to everything. What is done after that has not been determined. Some may go to jail if it is determined some were lieing.

      Also they hired an outside expert to determine who and how much should be given to all parties effected by the ignition key switch. Of course the plaintiffs may not be happy with the offer but they can sue to get more. That is if they have a suit against the new GM.

      Reply
  2. I think they have learned a little before Mary even took position as CEO. Now, I understand standards are probably more strict, but they’re putting out recalls faster, including recalls that just need to be a TSB. I believe they understand that if they do issue a TSB, that less people would get things checked out, not everyone that purchases a car goes back to the dealer service center after their purchase of vehicles. So by issuing a recall they hope more vehicles will get checked out and repaired. She just revised the company a little with quality and safety teams. Of course with the recalls on recent models that could be a TSB, they’re still plagued with problems of cars from the older company.

    Reply
  3. The recalls are a effort to take anything and everything that could be on the table off. Call it preemptive if you like.

    At this point they will recall anything that looks odd or even hints at a possible issue to make sure they have all things covered.

    Note even other MFG have even stepped up recalls as they know the same thing could easily happen to them once the media tires of GM.

    The next big shoe to fall will be the Justice department. I expect a fine similar to Toyota some where over a billion dollars.

    I really would like to see just where the money goes from this. and the Toyota and Ford issues. Not that I do not trust the Attorney General but I don’t.

    Once the big fine comes out the story will get kicked around a little more but it will be over as the public as a whole by then will not care or will be tired of it. That is how the Toyota deal went.

    Reply
  4. I thought the fine and GM’s agreement was interesting, because to me their agreement means they are taking responsibility. If the recall was the responsibility of the “old GM”, then why would the “new GM” have to tell anyone about it?

    Owners should search for “gm settlements” or “gm settlement fund” and get information from a qualified law firm after contacting GM to see what they are going to do for them. A lawsuit may or may not be the best option, but at least you have options. The lawyer they choose to work on the settlements is the same one BP used for the oil spill settlements, but he stopped doing that before it was completed. Do some research on how the BP settlements went to get idea what you’ll run into with the GM settlements run by the same person. At least the proof of “harm done” is a little more clear when you have accidents, injury, and death, rather that dead sea animals and people who can’t work anymore.

    Reply
    1. In bankruptcy GM agreed to take responsibility for old GM warranty and recalls.

      They have asked the bankruptcy judge to throw out suits for loss of value of vehicles and loss of value for stock, which they did not take responsibility for. They actually also did not take responsibility for personal damage suits but seem to be saying they will make payments to the victims.

      Reply
  5. I think the heads, and former heads should have to return bonus’s etc. They have hurt stockholders and hurt employees. If I am reading it right, that they new, heads should roll period. They jeopardized, lives, livelihoods, and the entire company suffers from it.

    Reply
    1. Please let us know what you are talking about.

      So far no names, no position, no anything has been reported that knew anything about the issue except the design engineer and a development manager.

      Reply
  6. Yes GM is only trying to remove the petty law suits that people file in hope of just some out of court settlement.

    At this point every car presented will be repaired free of charge even the ones that may be worn out.

    Also anyone injured or a family with a loss will receive a settlement from GM.

    In the end the only ones that GM intends to stiff are the people who really do not deserve anything.

    As for the people in the past what is done is done. No one will go to jail and no one will be fined or asked to return money. This will be treated as a corporate issues and not as anything else.

    Eric Holder will make a big fuss and announce a large fine and this will go away just as the Toyota throttle issue.

    Reply

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