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GM Slapped with $35 Million Penalty for Defective Ignition Switch Cover-Up

Tuesday, March 21, 2017By Richard Alexander

Defective ignition switches on millions of GM vehicles have led to countless car accidents and over a dozen fatalities. The defective switches turn the vehicle off while driving. This causes the driver to lose power steering and power braking capabilities. Also, if the vehicle ignition switch is in the off position, the airbags will not inflate in a crash.

GM knew about this defect for nearly 10 years before it recalled the affected vehicles. It appears that GM kept it from regulators from 2012 to 2014, when it finally recalled the vehicles. The failure on GM’s part to report the safety issue and share a plan of action earned the company a $35 million penalty, the highest penalty that the National Highway Traffic Safety Administration (NHTSA) was able to assess. In addition to that maximum penalty, GM also earned itself “tens of thousands of dollars in additional civil penalties for not responding on time to demands from the NHTSA for documents during the government’s investigation.

The financial penalty was not the only one that GM incurred. The unreported fatal ignition switch led to additional oversight requirements by the government. In addition, the event caused Congress to explore increasing the maximum NHTSA penalty to as much as $300 million and increasing maximum settlement amounts in safety defect lawsuits. Congress and the NHTSA were intent on making sure that manufacturers are held financially responsible for their failures to report safety issues and ensuing deaths.

Ultimately, GM did eventually recall over 11 million vehicles due to the defective ignition switches. However, some of its officials and employees knew for almost 10 years that there was a fatal safety issue with its defective switches. Instead of taking immediate action to save lives, GM sat on that information, watching the number of crashes and devastating fatalities climb before finally issuing the recalls.

If you or someone you love was injured by a defective GM ignition switch, contact the Alexander Law Group, LLP today at 888.777.1776. We are a nationally-recognized and award-winning personal injury law firm with offices in San Jose and San Francisco, and we stay up-to-date on legal developments in automobile product liability litigation.

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