The company was found to have failed to fix ignition switches in some vehicles which then led to the deaths of 120 people. In addition, the penalty includes the violation of not being able to answer immediately to the request of the government for the data and information needed for the GM ignition switch probe.
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GM CEO Mary Barra says the company has taken many steps to address how the company handles recalls, and personally ousted 15 executives in the wake of the investigation.
The ignition switch could be bumped or jarred, moving it from the run to accessory or off position.
In the agreement, the U.S. Attorney’s Office will defer prosecution for three years, and if GM holds to the terms of the agreement, the charges will be dropped after that time.
GM will also admit that it misled the government and the public about the safety of its vehicles.
In the private lawsuits, GM said it had set aside $575 million to settle the cases of about 1,380 people, all represented by Robert C. Hilliard, a lawyer who is among those leading the class-action cases against the automaker. The government agreed not to seek a conviction in exchange for the fine and the appointment of an independent monitor at the company.
Last year, GM recalled 2.6 million older small cars worldwide to replace the faulty switches.
Criminal charges stem from GM employees’ awareness of the issue almost a decade before they recalled the vehicles in question. (GM) for concealing a potentially deadly safety defect from the National Highway Traffic Safety Administration (NHTSA). The scandal worked totally against the company and damaged its reputation. When the problem was first spotted, millions of cars were recalled into service, but reports indicate that the defect caused over 100 deaths.
“To sum it up, they didn’t tell the truth in the best way that they should have, to their regulators, to the public, about the serious safety defects that risked life and limb”, said Bharara.
General Motors Co. settled almost 1,400 lawsuits tied to a defective ignition switch and other recalls, as the auto maker looks to move past the safety lapse on multiple fronts.
The Justice Department praised GM for taking “exemplary actions to demonstrate acceptance and acknowledgement of responsibility for its conduct”, including providing timely and meaningful cooperation with investigators, ousting wrongdoers and establishing the compensation program.
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“This is not money coming out of any executive’s pocket or any individual’s pocket”, he said. She said she felt like she was in mourning again and called the financial penalty a slap on the wrist..
