General Motors will remain under Uncle Sam's thumb.
The National Highway Traffic Safety Administration (NHTSA) has decided to extend federal oversight of the automakers’ review, decision-making and communications about potential vehicle safety issues for an additional year.
That means GM will have to continue submitting reports to and meeting with NHTSA in order for the agency to monitor the progress of company's investigation of potential safety issues and other actions required by NHTSA’s May 2014 Consent Order.
“GM learned a hard lesson last year,” said U.S. Transportation Secretary Foxx. “We expect to see the improvements they’ve made continue and that their new approaches are applied to every GM safety issue and every recall.”
The consent order
Last May, the company agreed in the Consent Order to pay a record $35 million civil penalty and to take part in unprecedented oversight requirements as a result of findings from NHTSA's timeliness investigation regarding the Chevrolet Cobalt and the automaker's failure to report a safety defect in the vehicle to the federal government in a timely manner.
The defect resulted in the non-deployment of airbags in certain Chevy Cobalt and other GM models. Today’s action is an extension of certain requirements of that agreement. Other requirements continue for an additional two years.
NHTSA says it extended its oversight “because the consent order has proven to be a productive and effective tool to proactively and expeditiously address potential safety-related defects.”
“Our oversight has been effective and GM’s in a better place,” according to NHTSA Administrator Mark Rosekind, adding, “We expect that our agreement will help them continue to improve their safety culture. Follow the rules, be accountable for your products, take good care of your customers and always make safety the priority.”
Meanwhile, The Wall Street Journal reports there's a chance federal prosecutors will bring criminal charges against the company over an ignition-switch defect that prompted GM to recall 2.6 million vehicles.
The defective switch can slip out of the run position and cut power to safety systems including air bags, power steering and power brakes.
The Journal reports a settlement is possible, but quotes people close to the situation as saying sticking points remain, including whether GM will have to enter a guilty plea and how big a fine it it may face.