Senate Democrats are proposing that the federal government should have the authority to impose as big a fine as they believe is warranted against auto makers for safety violations.
Sens. Richard Blumenthal (D-Conn.), Ed Markey (D-Mass.) and Bill Nelson (D-Fla.) introduced legislation in the wake of the Department of Transportation’s $35 million fine against General Motors last week. That fine was imposed after a determination that GM failed to report problems with an ignition switch, problems that are being linked to at least 13 deaths.
The three Democrats said the $35 million fine is just 0.1 percent of the $37.4 billion net revenue that GM saw in the first quarter of this year, and that much higher fines are needed.
“The $35 million fine levied on GM is a pittance compared to the company’s revenue and the damage caused by its deception and delay,” Blumenthal said.
“A penalty of $35 million is pocket change for a major auto manufacturer,” Markey said. “We can never put a price on the lives lost in auto accidents linked to safety defects but we can ensure that the price automakers pay after violating the law is a meaningful one relative to their profits.”
The $35 million fine was the maximum that the government could impose against GM under current law. On the day it was announced, Transportation Secretary Anthony Foxx proposed that Congress should increase the maximum fine to $300 million.
But Democrats said even that would be just a fraction of GM’s revenue. As a result, their bill would completely remove the cap on maximum penalties against auto makers in cases involving a “related series of violations,” and gives the Transportation Department the discretion to impose fines of any size it sees fit.
In addition to the fine, GM will have to undertake broad reforms to ensure safety problems are publicized once they are discovered.
“GM did not act and did not alert us in a timely manner,” Foxx said last week. “What GM did was break the law.”