Sunday, May 18, 2014

GM Pays for Delayed Response

Earlier this year GM recalled vehicles after problems were reported with the ignition switches in their cars, which would shut off while driving, disabling airbags, anti-lock brakes and power steering in some  circumstances. The problem with their recall is that GM employees knew about the problem as early as 2001, but they did not report it to anyone or inform customers

Transportation Secretary Anthony Foxx said in a statement, "Safety is our top priority, and today’s announcement puts all manufacturers on notice that they will be held accountable if they fail to quickly report and address safety-related defects." He continued to share that the government will not tolerate tardiness in safety recalls, "While we will continue to aggressively monitor GM’s efforts in this case, we also urge Congress to support our GROW AMERICA Act, which would increase the penalties we could levy in cases like this from $35 million to $300 million, sending an even stronger message that delays will not be tolerated.”

Foxx wants all vehicle manufacturers to be more aware of their recall process, otherwise they could find themselves in a similar situation to GM. The United States Department of Transportation said GM’s fine was the highest civil penalty paid from a National Highway Traffic Safety Administration investigation of a recall.

GM has been recovering since the recession in 2008 after filing for bankruptcy. As of right now the recall is not effecting sales, but it is too soon to tell what this will do to GM's reputation in the long-run. 

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