GM To Pay Record Fine Over Safety Recall

The Department of Transportation on Friday announced that it's ordering General Motors to pay a $35 million civil penalty for the handling of its ignition switch problems.

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STEVE INSKEEP, HOST:

NPR's Business News begins with the price of a safety defect. This is a developing story today. General Motors has agreed to pay $35 million in fines for violating federal safety laws. The National Highway Traffic Safety Administration, or NHTSA, has been investigating GM's handling of a recall of 2.6 million cars due to faulty ignition switches. They were linked with a number of deaths as you may recall. The agency wanted to find out how long GM new about the problem and whether the recalls could've come sooner.

We're going to talk about this now with NRP's Sonari Glinton, who's been covering the story. Hi, Sonari.

SONARI GLINTON, BYLINE: Hey, Steve.

INSKEEP: So what does this mean for General Motors other than they have $35 million less?

GLINTON: Well, given the circumstances, this is actually the fine the regulator can levy. But this is just the beginning. It doesn't include civil lawsuits or criminal investigations by federal or local governments. And it doesn't include a compensation package that could be potentially worked out with Kenneth Feinberg. It does show the thinking of General Motors, which is, from everything I've seen, is they're like, hey, guys, we want to get this over with. How soon can we get this over with? Can we get it over with? Is it over now?

INSKEEP: Oh, wait a minute. You're saying - General Motors is saying let's pay our penalty and go on. You're saying that's their attitude right now.

GLINTON: Yes. Exactly.

INSKEEP: OK. Well, let's listen to what the transportation secretary, Anthony Foxx, has been saying about General Motors.

(SOUNDBITE OF PRESS CONFERENCE)

ANTHONY FOXX: GM did not act and did not alert us in a timely manner. What GM did was break the law.

INSKEEP: And that's an important point here, Sonari, because it sounds like what the regulators are saying is not that GM made a mistake and had a defective car. That can happen. It's that GM did not respond to reports of the mistake and did not alert safety officials of what was going on.

GLINTON: Well, yes. Exactly. As far back as 2001, there was a problem with ignition switches in the Chevy Cobalt. But to be clear, this fine is not about the decade of foot dragging. It's about how the company didn't alert the government as soon as possible this year about the problem when it found out about it. So the other problems about the 10-years-long foot dragging, that's for other investigations and lawsuits. They will deal with that.

INSKEEP: Now the acting National Highway Traffic Safety Administration administrator is saying just in the last few minutes that GM's process was broken. Based on your own reporting in the past on this company, what process are we talking about here?

GLINTON: It's the process of when and how the company tells the regulator about a safety defect. And what we've seen recently is that the company has been sort of almost over sharing. Like, we have a problem, they're going to tell the government as soon as possible. And this is in part because of what's happened with GM, but also because of the billion-dollar fine that was levied against Toyota because of its problem.

INSKEEP: Oh, so multiple companies are now over sharing with the government in response to these events?

GLINTON: Yeah. Every single auto maker in the U.S. is a lot more willing to do a recall. The bar is set a lot lower. We're on record - we're on pace to set a record for recalls, not just GM, which is about to hit its 2004 record, by the industry as a whole.

INSKEEP: Well, I want to ask about one other thing, Sonari Glinton, because we're talking here about a $35 million fine to General Motors and the possibility, you said, of other problems and penalties as we go along. This has been a huge scandal. It's made huge headlines over a long period of time. Has it actually hurt General Motors in its bottom line?

GLINTON: Nope. Not yet. It's - consumers are still going out and buying their cars. The problem is the longer it takes to finish up, the longer we hear GM in the headlines, the longer that's a problem. But so far, sales are up for General Motors.

INSKEEP: That's NPR's Sonari Glinton reporting on a $35 million fine for General Motors. Sonari, thanks.

GLINTON: You're welcome.

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