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General Motors Concludes Consent Order with Federal Government

"Voluntary Cooperation Model" Stemming From Ignition Switch Recalls Created
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The General Motors Logo is seen here. GM

DETROIT, MI—General Motors Co. (GM) said on June 22 that it concluded a three-year consent order with the National Highway Traffic Safety Administration (NHTSA) regarding vehicle safety issues.

While problems with defective ignition switches have reportedly caused 124 deaths and 275 injuries since GM began a recall in early 2014, the three-year order resolves claims over the timeliness of the recall, among other things.

GM and its partners produce vehicles in 30 countries, and the company has leadership positions in the world's largest and fastest-growing automotive markets.

GM, and its various subsidiaries and joint venture entities sell vehicles under the Chevrolet, Cadillac, Baojun, Buick, GMC, Holden, Jiefang, Opel, Vauxhall and Wuling brands.

The order required dialogue between GM and NHTSA, but the company says it will now transition to a voluntary model to continue the safety discussions, which it says will also benefit the industry as a whole.

“Over the past three years, we have taken significant strides toward our goal of setting a new standard for customer safety,” said Jeff Boyer, GM vice president for Global Vehicle Safety.

Boyer added that GM has fielded hundreds of product safety concerns raised by its employees through “Speak up For Safety,” a company initiative.”

GM says the new "product safety structure" it created has enabled it to be more innovative with "safety oversight."

The company boasts of a “positive and productive relationship with NHTSA,” and says its proposal for continuing dialogue will include regularly scheduled monthly meetings with senior agency officials, and cover field investigations as well.

“GM’s goal is to bolster lessons learned and to continue a cooperative relationship between GM and NHTSA to help further advance motor vehicle safety,” said Boyer.

Still, since the ignition switch recalls in 2014, GM says it has been busy resolving ignition switch issues with customers and regulators at both the state and federal level.

On January 18, the company said it would pay a $1 million civil penalty to settle an investigation with the U.S. Securities and Exchange Commission (SEC). GM consented to the Cease and Desist Order, but did not admit or deny any wrongdoing.

“The SEC settlement does not call into question any of GM’s current or prior financial statements or its disclosures. Also, no material weakness or significant deficiency was found by the SEC.”

In the months immediately following the ignition switch recall, GM reorganized its vehicle engineering teams for greater transparency, urgency and accountability.

The inititiave created a new global vehicle safety organization focused on executing zero-defect safety systems. That organization also includes an "emerging issues and data analysis team and a re-engineered field investigation process," according to GM.

A “Speak Up For Safety” program also provides employees and suppliers with an opportunity to report or suggest any potential safety related items.

Still, GM settled a couple hundred ignitions switch lawsuits in New York Court recently. The automaker said it would settle more than 200 federal lawsuits filed by individual plaintiffs over defective ignition switches, according to a Reuters report.

While the settlement terms are private, “the accord could also resolve hundreds of state court claims [too],” GM’s lawyers said in a filing in New York federal court, according to Reuters.

GM did not immediately respond to a request for comment.

The automaker, which has reportedly dished out some $2.5 billion in penalties and settlement payouts, “has been defending against hundreds of lawsuits over faulty ignition switches that could cause engines to stall and prevent airbags from deploying in crashes,” reads the report.

GM attorneys are working with the plaintiffs’ attorneys to finalize the paperwork, according to Reuters, but the specifics “’ will take some time’ to implement.”

An NPR report posed several questions regarding GM’s corporate governance: For instance, how long did it know about the defective switches and do nothing?

“Why did the company not inform federal safety officials of the problem sooner? Why weren't recalls done sooner? And did GM continue to manufacture models knowing of the defect?” writes NPR.