After a year-long investigation, the Department of Justice has announced that it has found evidence of criminal wrongdoing in General Motors’ failure to disclose a manufacturing defect that is tied to the death of 104 people.
Unlike past manufacturers, G.M. has been assisting investigators instead of impeding or foot dragging to prevent discovery. This eagerness is expected to earn the automaker some good will with the DOJ.
G.M. likely hopes to avoid the sort of major fine that Toyota faced in 2014 after investigators determined that the Japanese automaker tried to hide a known acceleration problem from coming to light. Toyota was assessed a $1.2 billion criminal fine after a DOJ investigation.
G.M. hastens to say that it is cooperating. “We are cooperating fully with all requests,” G.M. said in a statement. But the automaker also said it wouldn’t comment further “on the status of the investigation, including timing.”
At issue is the Chevy Cobalt and several other small car models that had faulty ignitions that could sometimes turn the car off in use. The automaker recalled some 2.6 million Cobalts to fix the problem. In all, G.M. recalled a record 30 million vehicles worldwide in 2014.
Whatever the eventual outcome, the DOJ could slap General Motors with heavy charges of criminal misconduct. Investigators have also said that the company may have committed fraud during its bankruptcy proceedings in 2009 by not revealing the defects.
But the automaker has already paid out some $3 billion in recalls, including an estimated $600 million set aside for victims of the defects. G.M. also paid the National Highway Traffic Safety Administration a$35 million penalty last year.
General Motors benefited heavily from a $50 billion bailout courtesy of the taxpayers in 2009 — and that was the least of the favors given to company — but taxpayers lost $11.2 billion from the bailout.
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