Sen. Blumenthal: GM's fine has to be more than a "slap on the wrist"

Government fines GM $35 million for recall delay

Hit with lawsuits and battered by recalls, General Motors has now been slapped with a record fine of $35 million in connection with its delayed recalls of 2.6 million cars due to faulty ignition switches.

The U.S. Department of Transportation says GM will be subjected to "unprecedented oversight" and must make internal changes to prevent further violations.

"What GM did was break the law. They failed to meet their public safety obligations and today they have admitted as much," said Transportation Secretary Anthony Foxx on Friday.

Instead of telling the government about the problem within the required five days, though, GM waited years.

"GM engineers knew about the defect, GM investigators knew about the defect, GM lawyers knew about the defect, but GM did not act to protect Americans from that defect," said National Highway Traffic Safety Administration (NHTSA) acting administrator David Friedman.

The company says 13 deaths are connected to ignition switch problems. GM first knew about the problem in 2001, and the company knew as early as 2009 that the problem could disable a car's airbags.

Secretary Foxx is sending congress a proposal to raise the penalty from $35 million to $300 million.

Some members of Congress also think the civil penalty doesn't go far enough.

"Thirty five million dollars is too low of a fine, it is a parking ticket - we have to change the law so that the fine can be 5 times or 10 times greater than this fine is just so a message is sent that it can never again happen," said Sen. Ed Markey, D-Mass., in a statement Friday.

Sen. Richard Blumenthal, D-Conn., who chairs the Senate subcommittee in charge of highway safety, joined "CBS This Morning: Saturday" to discuss the $35 million fine imposed on the auto giant.

"I'm going to propose legislation to eliminate the cap entirely, because $300 million is still a pittance compared to $37 billion, which was GM's revenue just in the first quarter of this year," said Blumenthal. "So it has to be more than a slap on the wrist, more than the kind of parking ticket that right now the cap is."

In a statement, GM CEO Mary Barra said, "GM's ultimate goal is to create an exemplary process and produce the safest cars for our customers -- they deserve no less."

Blumenthal said there is currently a Department of Justice investigation underway that is trying to find out who knew what and when.

"This Department of Justice criminal investigation could produce a penalty much larger than the $35 million," he said. "In fact, if history is any guide, the Toyota settlement very recently resulted in a $1 billion-plus settlement to avoid criminal charges there."

Blumenthal said he had urged the U.S. Attorney General to expedite the probe because "hanging in the balance is the damage that GM has done."

Blumenthal said he's working on legislation that would provide more accessible data on car issues.

"Right now, most people wanting to know safety records or crash histories of cars have to submit a freedom of information request, which can take years. This data ought to be accessible on a database that is easily retrievable by any consumer, and there ought to be much more full reporting by these auto companies," he said. "Let's remember here, concealment can kill and GM concealed the facts for 10 years which resulted in additional deaths, injuries, and damage."

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