Story has been updated with government announcement and GM share price fluctuation
DETROIT (TheStreet)-- General Motors (GM) said Friday it has agreed to pay a $35 million fine to the National Highway Traffic Safety Administration for failing to report its ignition switch defect in a timely manner.
The defect resulted in at least 13 deaths, according to GM. The penalty is the maximum allowed under the law. Trial lawyers said at least 53 have been killed.
"We have learned a great deal from this recall. We will now focus on the goal of becoming an industry leader in safety," said GM CEO Mary Barra, in a prepared statement. "We will emerge from this situation a stronger company."
Transportation Secretary Anthony Foxx said, in a prepared statement, that the " announcement puts all manufacturers on notice that they will be held accountable if they fail to quickly report and address safety-related defects."
GM shares were trading higher late Friday morning, up 3 cents to $34.39, possibly reflecting the relatively small scale of the fine. Shares closed Thursday at $34.36, opened Friday at $33.75 and dipped as low as $33.49 during the morning.
NHTSA said GM must make "significant and wide-ranging internal changes" to its safety review process. It began fining GM $7,000 a day in early April after it missed the deadline for reporting the defect.
The automaker said it is working with NHTSA and has begun reviewing processes and policies to avoid future recalls of this nature.
"We are working hard to improve our ability to identify and respond to safety issues," said Jeff Boyer, vice president of Global Vehicle Safety. "GM has created a new group, the Global Product Integrity unit, to innovate our safety oversight; we are encouraging and empowering our employees to raise their hands to address safety concerns through our Speak Up for Safety initiative, and we have set new requirements for our engineers to attain Black Belt certification through Design for Six Sigma."-- Written by Ted Reed in Charlotte, N.C.
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