General Motors (NYSE: GM), the number one US automaker, has come under more pressure today as problems from their vehicle recalls continue to stack up. Today, GM was issued a $35 million fine by US safety regulators for the company’s delays in the recall of their small cars that has been manufactured with their faulty ignition switch, which has been associated with nearly 32 crashes and 13 deaths. GM has since acknowledged that they had long known about the issue, but did address it until the company started recalling vehicles in February of this year.
General Motors’ Response
The National Highway Traffic Safety Administration (NHTSA) has recently been probing into GM’s delay on their small-car recalls and the company has responded by claiming that GM has already begun reviewing its policies and processes in order to prevent any further delays.
The $35 million fine, which is the maximum amount that the fine is allowed to reach, has been deemed the single highest civil fine ever charged that was derived from a vehicle recall investigation. Even though it was the largest fine that GM could have sustained from the regulators, the amount barely makes a dent in the company’s balance sheet; having reported $37.4 billion in profits for their first quarter.
The $35 million fine now serves as a reminder to all automobile manufacturers that if their company fails to report defects discovered in their vehicles, major repercussions are underway for them.
How General Motors plans to move forward?
GM remains to be extremely compliant with the actions and allegations instilled upon them. Moving past today’s fine, GM has also agreed to provide the NHTSA with access to GM’s own internal investigation on the matter. GM has also enlisted the help of NY’s law firm, Wachtell, Lipton, Rosen & Kats, to assist the automaker in moving past their recall issues.