GM Fiasco Could Shake Up The Regulation Landscape

The fact that a lethal defect in millions of GM cars was missed by regulators has brought a wave of criticism to the regulator, the National Highway Traffic Safety Administration, as well as to the company. Quoted in a New York Times article, Congressman Tim Murphy (R-Pa.), who was presiding over the House hearings on the matter, dismissed an explanation offered by David Friedman, NHTSA’s acting administrator. “He basically told us that if only General Motors told them there was a problem, then NHTSA could have told GM there was a problem,” Murphy said. But fingers are pointing at Congress, as well. In recent years, it has cut NHTSA’s  budget, reduced penalties, and made it easier for companies to withhold information on the grounds it constitute business secrets.

Shortly after the Congressional hearings began, Ralph Nader weighed in with an editorial in USA Today. Nader cites a Friedman Research Corp. survey that finds GM’s faulty ignition switches were linked to 303 deaths, not the 13 that GM acknowledges, as he makes a renewed pitch for legislation first introduced several years ago by Rep. John Conyers (D-Mich.). That law, the Dangerous Products Warning Act, would require companies to inform the public and federal regulators of any known dangers from a product or service, and it would subject supervisors to criminal liability for failing to do so.

Meanwhile, GM has announced the creation of a new program designed to get employees to report potential product safety issues internally. That program, called “Speak Up for Safety,” will recognize employees for ideas that make vehicles safer and for speaking up when they see something that could impact customer safety, according to the company’s CEO, Mary Barra.