U.S. Transportation Secretary Anthony Foxx announces that General Motors will be fined a record $35 million in civil penalties as a result of the automakers failure to report a safety defect in one of its automobiles, May 16, 2014, in Washington, D.C.
Larry Downing/Reuters

General Motors to pay record $35 million over massive recall

General Motors must pay a record $35 million in fines to the feds for not promptly reporting an ignition switch defect that spurred a massive recall and was linked to the deaths of at least 13 people.

The fine tops the maximum amount the Department of Transportation can levy against the car company, Secretary Anthony Foxx announced Friday. In addition to the civil penalty, GM must also agree to “unprecedented oversight” as the result of a National Highway Traffic Safety Administration investigation into the recall of 2.6 million cars.

“Literally silence can kill.”
US Secretary of Transportation Anthony Foxx

“What we will never accept is a person or a company that knows danger exists and says nothing,” Foxx said in a press conference. “Literally silence can kill.”

A faulty ignition switch in some Chevrolet Cobalts, Saturn Ions and other GM cars would cause their engines to stall, disabling airbags and in some cases, power steering and power brakes. The car company first learned of potential defects with the ignition switch over a decade ago, but did not begin recalling the affected cars until this past February.

GM must also “make significant and wide-ranging internal changes to its review of safety-related issues in the United States, and to improve its ability to take into account the possible consequences of potential safety-related defects,” regulators said.

The top U.S. car company agreed to pay the fines and has already begun reviewing its policies for the future, GM CEO Mary Barra said in a statement Friday.

“We have learned a great deal from this recall. We will now focus on the goal of becoming an industry leader in safety,” Barra said. “We will emerge from this situation a stronger company.”

The fine is unprecedented and the highest allowed by law, but regulators want Congress to push that ceiling up to $300 million. The car company is also paying an additional penalty of $7,000 per day for not meeting the investigators’ deadline in submitting documents pertaining the events leading up to the recall.

“GM did not act and did not alert us in a timely manner. What GM did was break the law. They failed to make their public safety obligations,” Foxx said.

GM is already under investigations by the Securities and Exchange Commission, Justice Department and several states.

The press conference comes just a day after GM announced five more recalls for about 2.7 million vehicles. The largest recall of the five – affecting more than 2.4 million cars – is for tail lamp malfunctions.

Auto Industry

General Motors to pay record $35 million over massive recall