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May 27, 2017

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GM fined record US$35 million over ignition recall delay

WASHINGTON--The U.S. auto safety regulator Friday imposed a record US$35 million fine on General Motors for its failure to promptly recall cars with ignition faults linked to at least 13 deaths.

The National Highway Traffic Safety Administration (NHTSA) said the automaker took years to report the deadly problem even though company engineers were well aware of it in Chevrolet Cobalts and other models in 2009.

GM only notified the agency and began recalling 2.6 million cars in early February, setting off a Justice Department probe and victim lawsuits that could ultimately cost it billions of dollars.

"Safety is our top priority, and today's announcement puts all manufacturers on notice that they will be held accountable if they fail to quickly report and address safety-related defects," said U.S. Transportation Secretary Anthony Foxx.

"They had that information and they told no one," Foxx said. "Crashes happened, and people died."

Under the terms of a negotiated settlement, GM will have to undergo what the NHTSA called "unprecedented oversight" of its operations, including close monitoring of its handling of safety issues.

The problem behind the recall centers on ignitions that, after a jolt, or simply due to a heavy keychain, can move into the "off" or "accessory" position while a car is in motion.

That will switch off a car's electrical systems, including power steering and airbag deployment, even if the engine is still running, leaving drivers and passengers unprotected in a crash.

GM Knew of Dangers Years Ago

GM was aware of issues with the ignitions in the early 2000s before they were installed in cars, and it began receiving reports of problems from new car owners in 2005 and 2006.

NHTSA acting administrator David Friedman said that by 2009 GM engineers clearly knew that the ignitions could turn off by themselves and dangerously shut down airbag deployment.

And by 2012, he said, "GM engineers knew about the defect, GM investigators knew about the defect, GM lawyers knew about the defect."

Since announcing the recalls, GM says it has linked more than 30 accidents and 13 deaths to the ignition-airbag issue. The independent Center for Auto Safety says it has tracked 303 accidents in the GM cars in which the airbags did not inflate.

GM, whose new chief executive Mary Barra has admitted that the company was lax in handling the problem, said it was already implementing extensive changes in its management and oversight systems.

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