GM agrees to increased federal scrutiny image

As part of its “penitence” road on the way it handled the 2.6 million cars recall over ignition switch defects, General Motors agreed to a consent decree with federal regulators that would allow increased intervention.

This is just a first, small step – albeit one that is crucial and necessary – the company needs to allow increased scrutiny from federal investigators and any initial safety issues needs to be immediately passed to them as well – under condition of further serious penalties.

The No.1 US automaker is also likely to incur huge costs at least for this year, as the repair costs for this and other recalls mount up and legal fees will surely pile up from a mountain of litigations.

Also, as the automaker was under five different probes – besides the NHTSA, the Justice Department, the Securities and Exchange Commission and both houses of Congress all had their own investigations – which most likely will all translate to hefty fines.

Also, one of their bigger issues is – just like it happened back in 2010 to Toyota’s scandal regarding the unintended acceleration issues – how to recover its reputation, which was just now on a positive trend after the 2009 bankruptcy.

Also, as GM is under the radar, the public could correlate the 11.5 million cars recalled so far as to a company that if not prompted for the ignition switch recall, could have slipped many of them under the rug and overlook calling back the units all together.