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Increased Auto Safety Legislation Proposed

Investigation into General Motors' conduct has reignited interest in increased auto safety legislation. The chairman of the House Energy and Commerce Committee has announced his intention to introduce new legislation this year or the year after, with the goal of resolving the issues that allowed GM to avoid recalling millions of vehicles for more than a decade. So far, the defective ignition switches have been implicated in 13 fatal crashes.

The Senate and House of Representatives have already seen new bills proposed that would greatly increase the funding of the National Highway Traffic Safety Administration. The bills would also give the NHTSA greater authority and the power to levy fines up to $200 million against automakers who are found to have unnecessarily delayed recalls. Part of the concern regarding the GM situation is that GM stood more to lose by recalling the unsafe vehicles than it did by leaving them on the streets because the likely litigation costs and fines were not harsh enough penalties.

The White House has called for a potential fine of up to $300 million in cases where automakers do not notify the NHTSA with 5 days of a defect that poses a risk to consumers. Other legislators have called for no cap on the potential fine. The fine was doubled in 2012 to its current limit of $35 million. Several of the proposals would also require car dealers to repair known defects or at least inform buyers before completing a sale.

GM officials are facing a criminal investigation into their actions following the discovery of the ignition switch failures. A panel of the Senate Commerce Committee is also planning another hearing with current GM CEO Mary Barra later this month.

Source: The Detroit News, "Upton plans to introduce auto safety overhaul," by David Shepardson, 1 July 2014

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