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GM Missed NHTSA Disclosure Deadline – Suffers Paltry Fines – What Now?

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The April 3rd deadline passed and GM failed to satisfy the NHTSA request for records pertaining to the faulty ignition switch defect that has headlined the news for the past few months. On April 8, federal safety regulators issued a $28,000 fine and will continue to fine GM $7000 a day until the 107 questions set forth by the NHTSA have been answered.  For  a company like GM, these fines likely amount to the money it makes on its factory drink machines per day – i.e., walking around change.

General Motors has turned over 21,000 documents so far and five million documents from “75 individual custodians and additional sources,” Greg A. Martin, a company spokesman, stated.    Martin further stated that GM has “fully cooperated with the agency to help it have a full understanding of the facts.”  But it is not clear whether GM leadership at the highest levels even understands the facts.

In her appearance at the Senate and House hearings, Mary Barra, CEO of GM, said, “Sitting here today, I cannot tell you why it took years for a safety defect to be announced in that program, but I can tell you that we will find out. When we have answers, we will be fully transparent with you, with our regulators, and with our customers.”   Really?  The CEO cannot find these answers?  Apparently, there is an impenetrable code of silence at GM.

As federal regulators push for answers, GM is conducting an internal investigation of the recall of about 2.6 million cars with an ignition switch defect that GM has linked to 13 deaths.  (NYT, 4/9/2014)    The National Highway Traffic Safety Administration (NHTSA) says GM turned over less than half of the requested information. General Motors spokesman Martin says GM is “cooperating fully” (despite appearances apparently), citing its “internal investigation” (surely this can be trusted) as the reason for the delay in answering NHTSA’s requests. The issue is further complicated by questions over the slow action taken by NHTSA, which had some knowledge of the accidents linked to the faulty ignition switch as early as 2006. Congress and leading auto safety advocates want to know why NHTSA did not act sooner. Let’s be clear:  NHTSA dropped the ball, or stuck its head in the sand, or both.  Either is unacceptable.

Last week some of the documents disclosed by GM were released to the public, allowing us to get a glimpse at the internal workings of GM—continual changes in management, a lack of staff cooperation and inaccurate data, to name some. Maryann Keller, a veteran auto analyst who has written two books on GM, provided her assessment of the situation to Bloomberg News, “Typical General Motors. Where one hand doesn’t know what the other hand is doing, where matters of importance that may cost the company money are sidetracked or dismissed or buried inside the company and people who are supposed to be doing this aren’t given the resources.”    It became clear to this writer over the past fifteen years, having litigated multiple times against all of the Big Three manufacturers, and having read many internal documents,  that some of the decision-making by these companies produces proverbial head-scratching moments, leading one to wonder what the heck they were thinking.  Unfortunately, it always comes down to one basic answer:  money.

We have likely not heard the end of this story and we can be assured that more damaging details about GM’s internal operations will be revealed in the NHTSA investigation over the coming months. There are several questions the consumers will be left to answer on their own.  Can we trust [insert manufacturer’s name] the product and brand? Can we trust what they tell us?  And, what about our federal safety agencies?  They failed as well.  Will big corporate money continue to influence our regulatory system at the expense of public safety?  Will GM learn anything?  A cynic would say “probably not” to most of the above questions.