US government proposes increased fines on auto safety issues image

The Obama administration has moved to promote the NHTSA substantially increasing the legal fine for an automaker that doesn’t reveal safety defects.

While this move should act as a deterrent for the automakers, it’s at the moment still only a proposal – because it first needs Congressional approval and it’s still unclear if it could retroactively apply to General Motors as well, which is now involved in a huge scandal because of the 2.6 million cars equipped with faulty ignition switches.

The proposal is part of a bigger four-year transportation plan Transportation Secretary Anthony Foxx has presented before Congress, also asking for further funds in order to improve roads and repair bridges. The new fine would allow the National Highway Traffic Safety Administration to penalize with a maximum $300 million (from the current $35 million) charge any automaker found guilty of not responding promptly to a safety recall.

The proposed increase comes as General Motors is facing investigations from the NHTSA, Congress, the Justice Department and the Securities and Exchange Commission, and also around 60 lawsuits. They all revolve around lat February’s recall of 2.6 million cars equipped with defective ignition switches. The cars, with most models now discontinued, are from 2003-2010 model years and the defect has been linked so far to at least 31 crashes and 13 deaths.