April 8, 2014 at 8:42 pm

NHTSA fines GM $28K over ignition switch recall questions

Washington — The National Highway Traffic Safety Administration is imposing a $28,000 fine on General Motors Co. for failing to fully answer questions about the automaker’s recall of 2.6 million vehicles for ignition switch defects linked to at least 13 deaths. It warned it could turn the matter over to the Justice Department.

NHTSA said in a letter released late Tuesday that it plans to demand the maximum daily $7,000 fine for each additional day that GM fails to comply with its request for documents and answers to 107 detailed questions.

It says GM must “fully respond” to the unanswered questions “immediately,” or it may refer the matter to the Justice Department to sue GM to demand answers and payment.

The episode shows NHTSA’s patience is wearing thin. NHTSA’s acting chief, David Friedman, said last month that GM had failed to provide “timely information” that could have led to a faster recall.

The Detroit automaker could opt to challenge the fine, but declined to say if it would.

NHTSA criticized the automaker for not turning over documents in response to about one-third of its questions. GM said last week it had only responded to about 65 percent of NHTSA’s detailed questions within the 30-day time frame.

NHTSA noted that GM told the agency on April 4 — the day after the deadline — that it couldn’t answer all the questions because it has an ongoing outside investigation by former U.S. attorney Anton Valukas. He is looking at what went wrong in the company’s handling of complaints and problems with the ignition switch dating back to 2001. NHTSA could impose a $35 million fine if GM failed to recall the vehicles in a timely fashion.

“You explained that GM did not fully respond because an investigation by Anton Valukas and his team was in progress. This was the first time GM had ever raised Mr. Valukas’ work as a reason GM could not fully provide information to NHTSA in this timeliness investigation,” wrote NHTSA general counsel O. Kevin Vincent in a letter to GM’s vice president and general counsel for North America, Lucy Clark Dougherty. “Mr. Valukas’ investigation is irrelevant to GM’s legal obligation to timely respond to the special order and cooperate fully with NHTSA.”

GM spokesman Greg Martin defended the company’s response and didn’t say if it would contest the fine. He argued GM “has fully cooperated with the agency to help it have a full understanding of the facts.”

“GM has produced nearly 21,000 documents totaling over 271,000 pages through a production process that spans a decade and over 5 million documents from 75 individual custodians and additional sources. Even NHTSA recognizes the breadth of its inquiry and has agreed, in several instances with GM, to a rolling production schedule of documents past the April 3rd deadline,” Martin said. “We believe that NHTSA shares our desire to provide accurate and substantive responses. We will continue to provide responses and facts as soon as they become available and hope to go about this in a constructive manner. We will do so with a goal of being accurate as well as timely.”

NHTSA said it had agreed to give GM more time to answer questions on technical engineering questions as sought by GM on March 20. But NHTSA said GM also failed to answer non-technical questions — including if there were any other changes to the ignition switch beyond an April 2006 change that was made without a corresponding change in the part number.

“It is deeply troubling that two months after recalling the vehicles, GM is unwilling or unable to tell NHTSA whether the design of the switch changed at any other time,” Vincent wrote.

NHTSA also questioned why GM hasn’t answered whether its own Field Performance Evaluation Review Committee — which considered changing the ignition switch design in 2012 — asked for any further analysis before making its recommendation.

Referring to it and the question on ignition switch, NHTSA expressed frustration: “GM failed to respond to these requests. These are basic questions concerning information that is surely readily available to GM at this time.”

The Detroit News reported last month that GM has amassed more than 2 million documents totaling more than 6 million pages in its internal investigation.

Two congressional committees held hearings about the timeliness of the recall last week. GM CEO Mary Barra invoked the Valukas investigation repeatedly in declining to answer questions. The U.S. Attorney in New York has launched a criminal investigation into GM’s conduct.

The $7,000-per-day fine is merely symbolic for a company that made $3.8 billion in profit in 2013.

Karl Brauer, an analyst for Kelley Blue Book, said in an interview Tuesday that not complying with NHTSA requests reflects poorly upon GM. “Philosophically, unfortunately it’s just more indications that they’re either incapable or unwilling to fully cooperate with government requests.”

Brauer said using the excuse of the ongoing internal investigation — an answer GM CEO Mary Barra gave often last week in Congressional hearings which frustrated U.S. representatives and senators — could now be getting in the way of the government’s investigation.

“It’s now gone (from) being a reflection of GM’s desire to fully explore the causes of this delayed recall, to something that’s blocking or slowing resolution,” he said.

dshepardson@detroitnews.com
(202) 662-8735
Detroit News Staff Writer Melissa Burden contributed.