GM in heavy case over faulty ignition switches

Tuesday, May 20, 2014
 | 
Chris Woodward (OneNewsNow.com)

The federal government's fine for General Motors may only be a drop in the bucket compared to what GM will ultimately pay.

The government is fining General Motors $35 million for a lengthy delay in recalling small cars with faulty ignition switches that could move out of the run position, shutting off the engine and electric power and thereby knocking out power-assisted brakes and steering among other things. The $35 million fine is the maximum allowed by law.

Automakers are supposed to report safety problems within five days of discovering them, but as the Associated Press points out, GM has acknowledged knowing about the problem for at least a decade. That's one of the reasons Sharon Carty with AOL Autos thinks GM is going to pay more than $35 million.

“GM is going to have more fines coming down the road,” Carty says. “They're under investigation by the Securities and Exchange Commission and the Justice Department. This could cost them several billion dollars."

Berlau

Earlier this year, Toyota agreed to a $1.2 billion settlement with the Justice Department in a criminal probe over the company's recall of Toyota and Lexus vehicles that accelerated unexpectedly and were linked to multiple injuries and deaths.  However, John Berlau of the Competitive Enterprise Institute thinks there was less evidence in that case than in the current one with GM. 

"The ignitions would shut off [in the GM cars],” he explains. “GM actually warned against heavy key chains. Well heavy key chains are something an ignition should withstand." 

At least 13 people have died in crashes linked to the problems arising from GM's faulty ignition switches.

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