General Motors will pay a $35-million fine to the U.S. government for a growing recall scandal that today saw 8,560 midsized cars added to the list.
The Department of Transportation said Friday that GM had been fined the highest amount the agency has ever levied for its "failure to report a safety defect … in a timely manner."
The defect in question involved non-deployment of airbags in certain Chevrolet Cobalt and other models. Ignition switches on Cobalts and Saturn Ions can slip out of the "run" position and shut off the engine. That cuts off the power steering and brakes, potentially causing drivers to lose control. It also disables the air bags.
GM first acknowledged the problem in February, but it soon emerged that the company had known about it for nearly a decade before taking the proper steps to rectify it via a recall. Current U.S. law requires the company to disclose any safety defects to authorities within five days.
"Literally silence can kill," Transportation Secretary Anthony Foxx said. "GM did not act and did not alert us in a timely manner. What GM did was break the law."
Link to deaths
The company says at least 13 people have died in crashes linked to the problem, but trial lawyers suing the company say the death toll is at least 53.
In addition to the fine, GM has agreed to government oversight into its safety reporting practices.
Since first announcing the recall for that defect, GM has now recalled more than 11 million vehicles this year. The 8,560 cars recalled Friday are Buick Lacrosse and Chevrolet Malibu sedans which have a problem with the front brakes.
Rear brake rotors were mistakenly installed on the front. The rear rotors are thinner, so brake pads will wear faster and could lose contact with the brake calipers. That could cause longer stopping distances and brake failure.
The company says it has no reports of crashes or injuries due to the problem. The new recall includes 209 vehicles in Canada.
It's the sixth recall announced by the company this week and the 24th this year. Since January, GM has recalled about 11.2 million cars and trucks.
The figure is not the end of possible financial penalties for the automaker.
Earlier this year, Toyota was ordered to pay a $1.2-billion fine by the Justice Department for concealing unintended acceleration problems from government regulators, stemming back to incidents from several years ago.
The fine is the maximum allowed under current U.S. law. But the Department of Transportation is lobbying Congress to increase the amount of penalties it is allowed to impose by almost 10 times, to $300 million.
Indeed, the $35-million fine is a drop in the bucket compared to its sales last quarter, which totalled $37 billion — about $415 million per day.