Auto Recall Fines May Increase Under New Proposal

By | April 30, 2014
Transportation Secretary Anthony Foxx asked Congress to increase the maximum fines more than eightfold for automakers that fail to address safety issues in a timely manner. The current maximum is $35 million, which is a just drop in the hat for large automakers like Toyota and General Motors. Foxx wants to increase this number to $300 million. In light of GM's ignition switch defect linked to at least 13 deaths, safety regulators are taking action to make sure these massive safety problems get fixed quickly in the future. The proposal would also allow the government to force automakers to remove cars from the market once a defect is found. It would also prevent rental car companies from doling out recalled cars that need repairs.
Foxx's proposal is part of a four-year transportation plan that would give $302 billion to repair roads, bridges, and mass transit systems. The plan will also implement stricter safety standards for trucks and buses as well as improve city planning to facilitate the safety of bicyclists and pedestrians. However, the proposal may face opposition in Congress with Republican leadership in the House and Democratic leadership in the Senate. Also, automakers are likely to fight the increased fines, as they have with similar proposals in the past. Source: Automotive News (Subscription Required)