GM Fined $35 Million For Its Deadly Ignition Switch Problem

A faulty ignition switch that causes “power-assisted systems” to suddenly shut off in its cars has caused dozens of crashes.

GM Fined $35 Million For Its Deadly Ignition Switch Problem
[Image: Flickr user Ryan Frost]

After many hours of congressional scrutiny, General Motors has been levied the maximum penalty under the law for its failure to report a faulty ignition switch in 2.6 million of its vehicles. In a civil settlement with the Department of Transportation, GM–a company rescued from the edge of bankruptcy by the U.S. government in 2009–will have to pay a penalty of $35 million. (Yes, that’s million. With an “m.”)

GM, which currently has a market cap of $54 billion, is accused of withholding information from the public about a flawed ignition switch in its Chevy Cobalts, Saturn Ions, and other vehicles that would suddenly turn off the engine, air bags, and other “power-assisted systems” when jostled, reports the New York Times. The flaw was reportedly “widely known” within GM in 2012.

Nevertheless, it has been a trying first few months for new CEO Mary Barra, who was appointed to her post in December 2013, but was previously the company’s vice president of Global Manufacturing Engineering beginning in February 2008. “We have learned a great deal from this recall. We will now focus on the goal of becoming an industry leader in safety,” said Barra in a statement. “We will emerge from this situation a stronger company.”

Regulators are currently pushing lawmakers to increase the maximum penalty to $300 million. An internal investigation is still being conducted, but to date, GM has linked the faulty part directly to 32 crashes. In those accidents, 13 people have died.

About the author

Chris is a staff writer at Fast Company, where he covers business and tech. He has also written for The Week, TIME, Men's Journal, The Atlantic, and more.



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