GM said to settle criminal case over ignition switches – CNBC
It was unclear if any individuals would be charged in the ignition switch probe. After the Valukas report was released, GM fired 15 employees including engineers and lawyers, for failing to act to resolve the switch problem.
Clarence Ditlow, executive director of the Center for Automotive Safety, a nonprofit advocacy group and frequent auto industry critic, said it appears that no GM employees will be charged.
“GM killed over a 100 people by knowingly putting a defective ignition switch into over 1 million vehicles,” he said. “Today thanks to its lobbyists, GM officials walk off scot-free while its customers are 6 feet under.”
Prosecutors likely chose to charge GM with wire fraud because the company used electronic communications to interact with the government’s National Highway Traffic Safety Administration, the agency that it is required by law to notify when it finds out about a safety defect.
In May 2014, NHTSA levied a record civil penalty of $35 million against GM. It said the company violated federal law when it failed to notify the government of safety-related defects within five days of learning about them. NHTSA said GM also failed to respond in a timely manner to the government’s requests for information during its investigation of the defective switches.
The deal with GM comes roughly a year and a half after Toyota agreed to a $1.2 billion penalty from the Justice Department, admitting that it hid information about defects that caused Toyota and Lexus vehicles to accelerate unexpectedly and resulted in injuries and deaths. The Justice Department said at the time that it was the largest penalty of its kind ever imposed on an auto company.
GM’s fine is likely to be less than Toyota because the company cooperated with the investigation, according to legal analysts.
AP Writers Lawrence Neumeister in New York and Dee-Ann Durbin in Detroit contributed to this report.
This story has been corrected to show that the National Highway Traffic Safety Administration found that GM was slow to report problems with ignition switches, not air bags.