NEW YORK (TheStreet) -- The headline sounds pretty bad, huh? General Motors (GM) getting fined the maximum daily amount by the National Highway Traffic Safety Administration. That is, until you realize the maximum daily fine can't exceed $7,000.
For me or you, $7,000 a day for weeks might deal a crippling blow, but not for a huge company like GM.
In a time when investors continue to see headlines for millions of recalled vehicles and companies taking charges of hundreds of millions of dollars for the recalls, $7,000 a day is practically a relief. Even if this daily fine goes on for a year, GM is looking at paying only roughly $2.5 million.
According to the NHTSA, GM will be fined for failing to answer enough questions regarding its ignition-switch recall. The agency pressed the automaker with 107 questions. According to USA Today, GM left more than one-third of those questions unanswered.
In its own defense, GM has said it's "worked tirelessly from the start." I tend to agree. The company and its CEO, Mary Barra, have shown a great deal of transparency and cooperation in the investigation.
The issues with the NHTSA are based more on principal than on dollar amounts. Obviously, $7,000 per day doesn't mean anything. That would be like a normal person being fined a penny per day for some infraction.
But the NHTSA is bothered by GM's failure to respond to so many questions. From the same USA Today report, Carl Tobias, a law professor at University of Richmond, said, "It is a very stern letter. NHTSA intends to deal very strictly with GM."