A More Powerful NHTSA Is Needed

On Friday, federal regulators announced that GM agreed to pay a $35 million penalty for not recalling cars with faulty ignition switches, despite the fact that the automaker knew about the issue in 2004 and didn’t report the problem until February 2014. The faulty ignition switches are blamed for 13 deaths.

The fine is a drop in the bucket, less than one percent of the carmaker’s earnings in 2013, and highly unlikely to make any change in a corporate culture that encouraged a decade-long cover-up. GM’s CEO has vowed to change the culture and claims that the cover-up was due to the pre-bankruptcy culture at the automaker that placed profits before safety.

However, GM has had a checkered history when it comes to safety, dating back to the safety issues of the ill-fated Corvair, when the automaker tried to cover up the safety concerns expressed by some of its engineers. GM has made some of the most unsafe cars and SUVs in America.

This tale of cover-up by carmakers will likely continue until the National Highway Safety Traffic Administration is given a stronger mandate by Congress to test auto safety. Currently, the NHSTA relies on automakers to supply data on safety. That’s like a traffic cop asking a motorist how fast s/he was driving.

Ever since the financial crisis, banks have a small army of federal regulators looking over their shoulders, constantly looking over the books. Car safety should be no less an important concern to the federal government. The NHTSA has to be embedded in the automakers’ plants and sign off on the quality of safety based on their own testing data; otherwise, car makers, like GM, are bound to continue to take consumers for a ride.

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