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U.S. fines GM for ‘troubling’ responses on recall questions

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By Gabe Nelson, Crain News Service

WASHINGTON (April 9, 2014) — General Motors Co. was hit with federal fines April 8 over its ignition switch crisis after U.S. auto safety regulators concluded the company had not been forthcoming in responding to questions.

In a letter April 8, the National Highway Traffic Safety Administration (NHTSA) hit GM with a fine of $7,000 per day over its responses to a 107-question query the agency filed with the company last month after the recall widened to 2.2 million U.S. vehicles.

A financial penalty of that size will have little effect on a company the size of GM. But it sends a strong signal that NHTSA is unhappy with the pace at which GM is disclosing information and presages further struggles over company records that might explain why it took the auto maker a decade to recall the affected cars.

“GM did not respond to over a third of the requests in the special order by the April 3 deadline,” NHTSA Chief Counsel Kevin Vincent said in the letter, which is dated April 8 and was released to the public that afternoon. The fine now totals $28,000.

The letter adds to the complaints about GM’s answers to questions on the defective switch, which was used in several discontinued models, including the Chevrolet Cobalt and Saturn Ion. The switch, which could be bumped into the “accessory” position and deactivate the airbags, has been linked to crashes in which 13 people died.

GM, in a statement, said it has worked “tirelessly from the start to be responsive to NHTSA’s special order and has fully cooperated with the agency to help it have a full understanding of the facts.”

GM said April 8 that it has produced nearly 21,000 documents—totaling over 271,000 pages—through “a production process that spans a decade and over 5 million documents from 75 individual custodians” and additional sources.

“Even NHTSA recognizes the breadth of its inquiry and has agreed, in several instances with GM, to a rolling production schedule of documents past the April 3 deadline,” the company said April 8. “We believe that NHTSA shares our desire to provide accurate and substantive responses. We will continue to provide responses and facts as soon as they become available and hope to go about this in a constructive manner. We will do so with a goal of being accurate as well as timely.”

Several members of Congress voiced frustration at GM CEO Mary Barra during her testimony last week.

Ms. Barra declined to answer many questions about the ignition-switch flaw, saying the company had commissioned a full investigation by Anton Valukas, the chairman of the law firm Jenner & Block, and planned to wait for the results of that investigation before disclosing more information.

GM took a similar position in communications with NHTSA on April 3, the agency’s letter says.

“This was the first time GM had ever raised Mr. Valukas’ work as a reason GM could not fully provide information to NHTSA,” the agency says in the letter, before adding that the company again cited the Valukas investigation in communications on April 7. “Mr. Valukas’ investigation is irrelevant to GM’s legal obligation to timely respond to the special order and fully cooperate with NHTSA.”

According to NHTSA’s letter, GM said that it needed more time to answer some of the 107 questions because they would require detailed study by engineers. But NHTSA said the company also failed to provide answers to questions that should have required little analysis—such as whether the ignition switch was redesigned any time besides 2006, when a GM engineer approved a change by supplier Delphi.

“These are basic questions concerning information that is surely readily available to GM at this time,” the letter said. “Moreover, it is deeply troubling that two months after recalling the vehicles, GM is unwilling or unable to tell NHTSA whether the design of the switch changed at any other time.”

This report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.

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