DOT head: GM 'learned a hard lesson' after recall
Washington — The National Highway Traffic Safety Administration will extend a consent order requiring General Motors Co. to disclose detailed safety issues and meet with government officials monthly for at least another year.
Last year, GM agreed to the sweeping decree and paid a record-setting $35 million civil penalty for delaying a recall of 2.6 million older cars for ignition switch defects that are now linked to 104 deaths and nearly 200 injuries.
The auto safety agency said in a May 14 letter to GM obtained by The Detroit News on Thursday that it is opting to extend some requirements under a sweeping May 2014 consent decree. Under that agreement, GM was required to disclose for one year all possible safety problems to NHTSA and meet with the agency monthly. NHTSA is allowed to extend the agreement until as long as May 2017.
"GM learned a hard lesson last year," U.S. Transportation Secretary Anthony Foxx said in a statement late Thursday. "We expect to see the improvements they've made continue and that their new approaches are applied to every GM safety issue and every recall. Today's action will help keep them on the right track."
NHTSA told GM North America general counsel Lucy Clark Dougherty that it was extending the meetings and reporting requirements, but not because it is disappointed in GM's actions.
A lawyer for the federal agency, Timothy H. Goodman, wrote that NHTSA found the order "to be a productive and effective tool to proactively and expeditiously address potential safety-related defects."
NHTSA said it was not extending the order "based on a concern with GM's performance to date, but rather to continue the dialogue those requirements have facilitated on important safety issues." In 2016, NHTSA could opt to extend the agreement for another year if it chooses.
Deputy Administrator David Friedman in announcing the deal in 2014 said the agreement commits GM to "unprecedented and immediate reporting to NHTSA of safety issues under consideration by the company and to transparency into GM's activities and changes for up to three years." The government found GM repeatedly delayed acting on the ignition switch problems — and Friedman called the evidence "deeply disturbing."
GM must disclose all vehicles that are in the early stages of investigation by GM for possible recalls. The automaker also must disclose new technical service bulletins or other dealer communications; its decision-making associated with safety-related or high-frequency warranty claims or safety-related field reports; and other potential safety defects.
In practice, even though the agreement only required monthly meetings, GM's safety chief Jeff Boyer has often met with NHTSA at least weekly over the last year.
GM spokesman Jim Cain said Thursday the automaker wants to continue working with NHTSA: "We have used our monthly meetings with NHTSA to foster a relationship that's candid, transparent and totally focused on the safety of our customers. We've come a long way and we fully intend to build on this progress."
The automaker faces an ongoing criminal investigation by the U.S. Attorney's Office in Manhattan, aided by a federal grand jury. It also faces probes by 50 state attorneys general, the Securities and Exchange Commission and Transport Canada.
GM is eager to show prosecutors that it has reformed its ways and is fully complying with its auto safety responsibilities. GM CEO Mary Barra has repeatedly said she would like to resolve the government's investigations, but it is unclear when a resolution might be reached. Wall Street analysts have suggested GM may have to pay a multi-billion dollar fine — and it could be required to have an independent monitor overseeing the automaker's safety actions as part of any settlement.
In the aftermath of the recall crisis and congressional hearings, GM hired dozens of new safety engineers, as Barra reorganized GM's safety organization. After a scathing internal report, Barra fired 15 and disciplined five employees. Last year, GM recalled a record-setting 30 million vehicles worldwide in 84 recall campaigns. The number of vehicles called back this year by GM has fallen sharply as the automaker has worked to identify problems earlier.
NHTSA praised GM's actions.
"Automakers can learn an important lesson from GM," said NHTSA Administrator Mark Rosekind. "Follow the rules, be accountable for your products, take good care of your customers and always make safety the priority."