GM Ignition Switch Fine to Top $1.2 Billion

The Department of Justice is expected to fine General Motors more than $1.2 billion in connection with its delayed recall of automobiles with faulty ignition switches. The DOJ is still considering whether to require a guilty plea to criminal charges or offer a deferred prosecution agreement. This includes a possible charge of criminal wire fraud for misleading statements and the concealment of the defect.

The amount of the fine may still change. Wall Street analysts have speculated that the fine may exceed $2 billion. GM has already paid a fine of $35 million, the maximum the auto regulator is currently allowed to penalize a company for these types of cases, to the National Highway Traffic Safety Administration. Federal prosecutors are hoping to resolve the matter by early fall.

The total number of deaths from defective ignition switches in GM vehicles is now 111, since two more claims were approved by the compensation fund last week. GM has also approved claims for 12 serious injuries and 179 other injuries. 191 claims are still being reviewed. The total cost of compensating victims is estimated at around $550 million. The deadline for submission was January 31st.

In March 2014, Toyota Motors was fined $1.2 billion by the Justice Department for misleading consumers about the unintended acceleration of its vehicles through deceptive public statements. This was the largest criminal fine ever levied against an automaker by the United States. Toyota initially blamed acceleration issues on floor mats becoming stuck under gas pedals as well as driver error. Toyota also entered into a deferred prosecution agreement with the Government.

Two internal reports from the Transportation Department have also identified mistakes made by the NHTSA. The agency reportedly missed clues about the defect and is revising its procedures in response to the reports. President Obama is also seeking to provide the NHTSA additional funding and lift the maximum cap on penalties issued by the agency.

The Senate has already passed the Motor Vehicle Safety Whistleblower Act sponsored by Senators Thune and Nelson to provide monetary incentives to auto whistleblowers employed by car manufacturers, dealers and part suppliers about delayed recalls and other violations of federal law. The House has yet to act on the proposals for auto safety legislation made in light of the recalls by Toyota, GM, and Takata.

To learn more about the proposed bill, contact one of our whistleblower attorneys via our contact form or by calling 1-800-590-4116.

Photo Credit: MDGovpics

Spring 2016 Update:

The Thune-Nelson proposal was signed into law by President Obama as part of the FAST Act in December 2015. For additional information, please visit our page dedicated to auto whistleblowers.