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GM first carmaker to have safety issues overseen by government

Las Vegas residents trust their safety to the vehicles around them on a daily basis; they drive, ride in public transportation, and navigate around cars as they walk along roadways. Because of this, a great deal of pressure is placed on car manufacturers to ensure that their vehicles are safe for drivers, passengers and pedestrians. When this trust is breached, these companies can face federal fines, severe court-ordered punishments, business litigation and criminal lawsuits.

General Motors is making history as the first automaker to ever receive an order requiring federal oversight of the company’s safety practices. This comes as a result of investigations into an ignition switch defect that has led to 13 deaths and the recall of millions of vehicles. Under this order, the company would meet with regulators on a monthly basis to review safety issues and dealer communications.

This is just one aspect of the many business disputes GM is currently facing regarding its product liability issues. The company has also been ordered to pay a $35 million fine—the biggest financial penalty that federal regulators are able to impose. In addition, GM must contend with hundreds of lawsuits regarding the fault ignition switch, both civil and criminal.

Business issues that capture the public imagination, such as massive recalls involving fatal product defects, can have damaging effects on a corporation’s image and finances. If your company is currently facing business litigation involving unfair competition, deceptive trade practices or product liability, it may be wise to review your situation with an attorney.

Source: The New York Times, “G.M. Is Fined Over Safety and Called a Lawbreaker,” Matthew L. Wald and Danielle Ivory, May 16, 2014. 

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