NHTSA to Fine GM $7,000 a Day Until it Gets Some Answers
Business + Economy

NHTSA to Fine GM $7,000 a Day Until it Gets Some Answers

REUTERS/Mark Blinch

Federal auto safety regulators Tuesday said General Motors is in violation of a special order demanding answers to an exhaustive list of questions about its slow recall of cars with faulty ignition switches and began fining the giant automaker $7,000 a day until it complies.

GM, which is facing multiple federal investigations into the ignition-switch problem it has linked to 13 deaths, on Friday turned over more than 200,000 pages of documents to the National Highway Traffic Safety Administration as part of the agency’s inquiry.

In a special order given to the automaker last month, the agency demanded answers to 107 questions as well as reams of documents to support those responses by April 3. But the automaker failed to meet those demands, NHTSA said.

In a letter to GM, NHTSA’s chief counsel said the automaker failed to answer many of the questions posed by NHTSA, citing an ongoing internal investigation being led by former federal prosecutor Anton Valukas.

NHTSA called GM’s response inadequate and promised to take tough action until the automaker complies. NHTSA itself is under scrutiny from members of Congress and auto safety advocates for not doing more to uncover the deadly ignition switch defect that has led to the recall of 2.6 million Chevrolet Cobalts and other GM small cars.

“Mr. Valukas’ investigation is irrelevant to GM’s legal obligation to timely respond to the Special Order and fully cooperate with NHTSA,” O. Kevin Vincent, NHTSA’s chief counsel wrote in a letter to GM.

Vincent said GM would face a $7,000-a-day fine retroactive to April 3. He added that if the automaker fails to fully respond soon, the agency may refer the violation to the Justice Department to file suit to compel the automaker to respond and pay civil penalties.

GM said it is trying its best to respond to NHTSA’s order. “GM 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,” the company said in a statement. “GM has produced nearly 21,000 documents totaling more than 271,000 pages through a production process that spans a decade and more than 5 million documents from 75 individual custodians and additional sources.”

The run-in with NHTSA is just the latest problem for the giant automaker in connection with the ignition switch recall.

During hearings in both the House and Senate last week, GM chief executive Mary T. Barrawas excoriated by skeptical lawmakers who demanded to know why GM moved so slowly to recall cars with the faulty ignition switches even though the company first learned of the problem more than a decade ago.

In her testimony, Barra — who took over as GM’s CEO earlier this year — called the automaker’s actions unacceptable and linked them to the “cost-conscious” culture that pervaded the company in the years leading up to its 2009 bankruptcy and federal bailout.

But she mostly demurred on specific questions, saying she was awaiting the results of the internal investigation so she could fully understand what happened and hold people accountable.

The delayed recall has triggered probes by Congress, NHTSA and federal prosecutors, who are exploring the possibility of bringing criminal charges against GM. Meanwhile, the automaker is facing lawsuits from accident victims, shareholders and even owners of the affected cars who say their vehicles have lost value because of the switch problem.

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