GM enters into consent decree on recalls — as it recalls 2.7 million more vehicles

posted at 10:41 am on May 16, 2014 by Ed Morrissey

CNBC got the story first this morning about the settlement of its ignition-switch defect, one that will include “a substantial fine.” The automaker had to issue a massive recall earlier this year after evidence emerged that GM hid the defect, and that also suggested that NHTSA shrugged it off while the federal government held a massive stake in the company:

General Motors has entered into a consent decree with the U.S. government over the timeliness of its ignition switch recall, CNBC has learned.

As part of the deal, the automaker will pay a fine. The Department of Transportation probe into the recall is expected to continue.

Details are still sketchy on the amount of the fine. The Detroit News reports that the maximum fine would be $35 million, which would be twice what Ford paid for a similar issue:

GM faces up to a $35 million fine under current law for failing to recall older Cobalt, Ion and other cars. Many officials have expected that GM will be forced to pay the maximum fine. If so, it would top the record-setting fines imposed on Toyota Motor Corp. and Ford Motor Co. for failing to recall vehicles in a timely fashion.

The Justice Department, two congressional committees and the Transportation Department’s inspector general are also reviewing the GM recall.

NHTSA decided in June not to publicize a large fine imposed on Ford Motor Co. for failing to recall more than 400,000 vehicles in a timely fashion after it had publicized the five previous fines issued to major automakers over recalls since 2010. The fine was posted on a government website but went unnoticed until the Wall Street Journal reported the news more than a month after Ford agreed to pay the fine.

Ford paid NHTSA a $17.35 million fine after the agency said the automaker did not notify customers of a defect in a timely manner after it recalled 423,000 2001-04 Ford Escapes and Mazda Tributes in July 2012, the maximum fine under current law. Ford did not admit any wrongdoing.

CBS reports that it’s $35 million. As the CNBC announcer said, even the maximum fine in this case would be a slap on the wrist — amounting to less than $4 per car.

The timing on this is … uncanny. One might even suspect that it was designed to overshadow the fact that GM just added another 2.7 million cars to its recall list for other issues, making it the biggest active domestic recall ever in the aggregate for the automaker:

General Motors Co (GM.N) said on Thursday it has issued five more recalls, covering almost 3 million vehicles globally, and is expected to take a charge of up to $200 million.

Still dealing with fallout from the recall of defective ignition switches linked to at least 13 deaths, the No. 1 U.S. automaker said the largest of the latest recalls covers more than 2.7 million cars for tail lamp malfunctions, including the Chevrolet Malibu, Pontiac G6 and Saturn Aura cars.

The other four recalls cover Malibu, Chevy Corvette sports cars, Cadillac CTS sedans and full-size trucks and SUVs. Most of the vehicles were sold in the United States.

GM said the new actions were a result of the sharper focus the company has put on safety issues following the recall earlier this year of 2.6 million vehicles for the faulty switch. So far this year, GM has recalled almost 12.8 million vehicles globally, easily topping the 9 million recalled in the previous five years combined.

The resolution of the DoT’s case against GM may mean less public pressure on the automaker, but they may not be the only beneficiaries of the settlement. The National Highway Transportation Safety Administration had plenty of knowledge that the GM vehicles had a significant defect. They took in far more complaints about the ignition switch and related airbag issues on GM vehicles than they did on Toyota vehicles with acceleration issues, and yet the government went to the mattresses with GM’s competitor and let GM off the hook. Was that decision influenced by the need to keep GM stock prices up so that the Obama administration could unload them — and defraud the investors who ended up buying them?

The DoT may be done with GM, but Congress should just be getting started with the NHTSA.

Addendum: Coincidentally, I’m in the market for a new vehicle. Not coincidentally, I’m not looking at GM products. That’s entirely based on quality ratings, not political considerations, though … which is kind of the point here, in the end.


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Addendum: Coincidentally, I’m in the market for a new vehicle. Not coincidentally, I’m not looking at GM products. That’s entirely based on quality ratings, not political considerations, though … which is kind of the point here, in the end.

Toyota…Honda…Ford…that order, take your pick.

right2bright on May 16, 2014 at 10:47 AM

In a sane world, Obama would be politically destroyed over this.

Bigbullets on May 16, 2014 at 10:47 AM

GM faces up to a $35 million fine under current law for failing to recall older Cobalt, Ion and other cars.

Don’t worry..

Us taxpayers will pay this….

Electrongod on May 16, 2014 at 10:47 AM

In a sane world, Obama would be politically destroyed over this.

Bigbullets on May 16, 2014 at 10:47 AM

In a sane world Obama wouldn’t have made it to the Senate let alone the WH.

hawkeye54 on May 16, 2014 at 10:49 AM

GM is alive and Osama Bin Laden is dead!

Yay!

NavyMustang on May 16, 2014 at 10:49 AM

Toyota…Honda…Ford…that order, take your pick.

right2bright on May 16, 2014 at 10:47 AM

With Ed’s Hotair Koch-machine money the list should be:

Porsche…BMW…Mercedes

He could probably buy a new car just on his KochKash from his anti-Climate Change post this morning.

=)

gwelf on May 16, 2014 at 10:51 AM

Where does the money from all these massive corporate fines end up? An Obama family slush fund for vacations and parties? Maybe the money should be used to fix the roads and bridges around the country (of course with zero provisions that only labor unions can bid on the contracts).

iamsaved on May 16, 2014 at 10:52 AM

even the maximum fine in this case would be a slap on the wrist — amounting to less than $4 per car.

Good grief…bring back the Pinto…

right2bright on May 16, 2014 at 10:52 AM

Remember when Romney said let GM go bankrupt? How many lives would that have saved?

petunia on May 16, 2014 at 10:54 AM

Four bucks per vehicle which is four bucks per life of people who died because of those defective ignition switches.

I just bought one of my boys a used Ram 1500, not sure of the overall quality but the Hemi plant is a monster and the rear coil springs make the ride pretty nice.

I wouldn’t buy GM right now if you held a gun to my head and their new trucks look like bricks on wheels.

Bishop on May 16, 2014 at 10:54 AM

I wouldn’t buy GM right now if you held a gun to my head and their new trucks look like bricks on wheels.

Bishop on May 16, 2014 at 10:54 AM

Re-education camp for you……
:)

Electrongod on May 16, 2014 at 10:59 AM

evidence emerged that GM hid the defect, and that also suggested that NHTSA shrugged it off while the federal government held a massive stake in the company

…like with the VA and ObamaCare…THIS government has your back!

KOOLAID2 on May 16, 2014 at 11:01 AM

Does anyone honestly think that Government Motors is any less corrupt that the entire rest of the Federal government?

oscarwilde on May 16, 2014 at 11:02 AM

Addendum: Coincidentally, I’m in the market for a new vehicle. Not coincidentally, I’m not looking at GM products. That’s entirely based on quality ratings, not political considerations, though … which is kind of the point here, in the end.

 
4 cylinder Accord LX sedan with a manual transmission. A more functional, entertaining, and honest car probably doesn’t exist, and all for right about $20K new.
 
(Not to mention Honda finally got the rear end looking decent again, so it’s handsome, too.)

rogerb on May 16, 2014 at 11:07 AM

Great the government gets 35 million, the victims…. not so much

bsinc1962 on May 16, 2014 at 11:12 AM

Oh, and the new Mazda 6.

rogerb on May 16, 2014 at 11:29 AM

Don’t worry..

Us taxpayers will pay this….

Electrongod on May 16, 2014 at 10:47 AM

Right. It must not impact top management or union employees.

bw222 on May 16, 2014 at 11:32 AM

Great the government gets 35 million, the victims…. not so much

bsinc1962 on May 16, 2014 at 11:12 AM

Actually, the fine opens them up to lawsuits related to any deaths/injuries. Unless that amnesty BS kicks in, of course.

GWB on May 16, 2014 at 11:37 AM

But, do they have back-up cameras? Seems the NHTSA was too busy writing more rules for automobiles to be bothered with some switches that shut off the vehicles while they are moving.

Need those cameras for the children (at least the ones that are not aborted)! Priorities and all.

libbyscooter on May 16, 2014 at 11:39 AM

Government Motors … right up there with Trabant and Lada.

M240H on May 16, 2014 at 11:54 AM

My GM SUV is less than 10 years old and is falling apart. It sold new for over $60K and has been a money pit because of the poor quality of the components. Hell, I have 5 things on the list right now that it has to be taken in for: airbag issue (why?), bad sensor/hub, failing HVAC lines, rear wiper motor out, tire monitor is toast (new one).

I can’t wait to get rid of the GMC and move to a Toyota. I used to like the GM styling better than Toyota, but the new SUV’s look horrible anyway. The new Denali? A brick with the ugliest headlight design I’ve seen in years.

Free Indeed on May 16, 2014 at 11:59 AM

I’m in the market for a new vehicle. Not coincidentally, I’m not looking at GM products. That’s entirely based on quality ratings, not political considerations, though … which is kind of the point here, in the end.

well, not really, after this was pointed out beforehand (lead paragraph, no less)…

…suggested that NHTSA shrugged it off while the federal government held a massive stake in the company

socalcon on May 16, 2014 at 12:02 PM

Great, I own a 2008 Saturn Aura. Haven’t noticed any problem with the taillights but I will certainly take it in for the repair. I will never buy another GM car, but the Saturn has been a good one. GM really screwed up by killing that brand.

I just bought a 2012 VW Passat TDI and am thrilled with it so far. It’s made in Chattanooga by the workers that just voted down the UAW. Getting upwards of 45 MPG, and it doesn’t need an emissions inspection. VW dealers where I live are fantastic. We looked at several Passats and were treated extremely well by all the dealers, save one that tried to charge us huge junk fees.

4 cylinder Accord LX sedan with a manual transmission. A more functional, entertaining, and honest car probably doesn’t exist, and all for right about $20K new.

(Not to mention Honda finally got the rear end looking decent again, so it’s handsome, too.)

rogerb on May 16, 2014 at 11:07 AM

Great car for the money. I had a 1986 Accord that went to 200k miles with almost no problems. And you’re right, they did finally fix that awful rear end. Accords had been downright ugly for the last 5 years or so.

rockmom on May 16, 2014 at 12:04 PM

Four bucks per vehicle which is four bucks per life of people who died because of those defective ignition switches.

Bishop on May 16, 2014 at 10:54 AM

Can you recheck your math?

socalcon on May 16, 2014 at 12:04 PM

The GM scumhag CEO is a knowing criminal.

Schadenfreude on May 16, 2014 at 12:08 PM

(Not to mention Honda finally got the rear end looking decent again, so it’s handsome, too.)
 
rogerb on May 16, 2014 at 11:07 AM

 
Great car for the money. I had a 1986 Accord that went to 200k miles with almost no problems. And you’re right, they did finally fix that awful rear end. Accords had been downright ugly for the last 5 years or so.
 
rockmom on May 16, 2014 at 12:04 PM

 
+1. I had the same year LX-i with the automatic transmission, and the only thing I ever had to replace was the alternator at ~120K. I sold it with 250K miles twelve or so years later and still got $1000 out of it.

rogerb on May 16, 2014 at 12:27 PM

Wow. $20.5K for the new Accord at Truecar ($21.3K for the automatic).
 
http://imgur.com/YVkQulh

rogerb on May 16, 2014 at 12:30 PM

Addendum: Coincidentally, I’m in the market for a new vehicle. Not coincidentally, I’m not looking at GM products. That’s entirely based on quality ratings, not political considerations, though … which is kind of the point here, in the end.

Toyota…Honda…Ford…that order, take your pick.

right2bright on May 16, 2014 at 10:47 AM

I wouldn’t bother with the Ford either. The company is not the problem, it’s the corrupt and greedy UAW. Avoid anything built by the UAW.

I prefer foreign car companies that build their product in the USA.

slickwillie2001 on May 16, 2014 at 12:32 PM

Not coincidentally, I’m not looking at GM products. That’s entirely based on quality ratings, not political considerations, though … which is kind of the point here, in the end.

Haven’t owned a GM vehicle in 20 years and won’t ever again. I quit buying GM for the lack of quality. Since GM latched onto the government teat and took the taxpayer money to save the union pensions, it’s a political consideration now.

TulsAmerican on May 16, 2014 at 12:50 PM

As part of the deal, the automaker will pay a fine.

So when will King Barack the Magnificent SUSPEND the fine?

GarandFan on May 16, 2014 at 1:12 PM

If I were to buy a new vehicle (as opposed to a nice used one) no doubt it would be a Ford F-150 raptor, those things are awesome. I really love my 1998 4runner, the first Toyota I’ve ever owned. I owned a ’71 vega in the mid 70′s and that experience made me swear off of GM products for life.

Mini-14 on May 16, 2014 at 1:14 PM

Hey Ed, if you want a new vehicle, come and look at Nissan. Most of our cars are made here and I work for them. Solid cars, good reputation. As a bonus, I work for them, which shows we have good taste in blogs to read. ;)

Freed0m28 on May 16, 2014 at 2:04 PM

35 million dollars??? How much did Toyota have to pay? oh yeah, a lot more than that…1.2 billion dollars in fact!!!

sadsushi on May 16, 2014 at 2:20 PM

Government Motors … right up there with Trabant and Lada.

M240H on May 16, 2014 at 11:54 AM

If you speak German, this skit by brilliant comedian Hape Kerkeling is hilarious!

It’s about a guy who was on the looooong waiting list for a “Trabi” whose number finally comes up…years after the wall fell!

Comedy gold!

NavyMustang on May 16, 2014 at 2:21 PM

How many young Demos that bought a GM car because they loved Barry are getting a little fed up?

formwiz on May 16, 2014 at 2:49 PM

If you speak German, this skit by brilliant comedian Hape Kerkeling is hilarious!

It’s about a guy who was on the looooong waiting list for a “Trabi” whose number finally comes up…years after the wall fell!

Comedy gold!

NavyMustang on May 16, 2014 at 2:21 PM

Dwight Shroot’s brother?

dirtseller on May 16, 2014 at 3:25 PM

Before you get too excited, that “enormous” fine = 0.02% of GM’s profits this year. That amounts to a transaction fee to commit fraud and, possibly, kill citizens.

Hucklebuck on May 16, 2014 at 7:47 PM

Addendum: Coincidentally, I’m in the market for a new vehicle. Not coincidentally, I’m not looking at GM products. That’s entirely based on quality ratings, not political considerations, though … which is kind of the point here, in the end.

Who in the world would buy a new GM vehicle these days? You would have to be crazy.

Theophile on May 17, 2014 at 3:35 AM

Dwight Shroot’s brother?

dirtseller on May 16, 2014 at 3:25 PM

Never heard of Dwight Shroot, but now that I see a picture…YES!

Hape Kerkeling is probably the most brilliant German comedian going. His impersonation of Queen Beatrix of the Netherlands is pee in your pants funny. He actually went to a meeting in Holland and tried to convince the security that he was actually the Queen. I remember at one time that skit was not allowed to be shown in the Netherlands.

He does stuff like the video I linked to all the time. He’ll just show up at someone’s house and BS them into believing whatever. It is incredible.

Worth learning German just to understand “Der Hape!”

NavyMustang on May 17, 2014 at 8:36 AM

Liberal government trial lawyers feast on the carcasse of liberal Government Motors to the ultimate loss of well-paying union jobs and the taxpayer who funds all of this simulation of a company.

virgo on May 18, 2014 at 12:21 PM