Photo: GM
I’m not fond of the “too big to fail" theory, but the U.S. government was right to bailout America’s auto industry in 2009. General Motors received $50 billion to get back on track, but the ghost of “Old GM” lingered on long after the reorganization.
It all came crashing down for “New GM” in February 2014, when the biggest automaker in North America announced that some of its cars are equipped with faulty ignition switches. Nearly 30 million vehicles were recalled on a worldwide scale, the families of 124 dead and many more injured received financial compensation, whereas the government got itself $900 million.
The latest development of the ignition switch saga sees General Motors accepting to pay a $1 million civil penalty. “$1 million? Not even a used Bugatti Veyron is that cheap,” you might be thinking, and you’re definitely right. But the United States Securities and Exchange Commission couldn’t get more out of General Motors for its wrongdoing, so that’s that.
Consenting to an administrative SEC Cease and Desist Order, however, doesn’t wash away GM’s malpractice. It actually favors the culprit, chiefly because General Motors is not obliged to deny or admit any misconduct. So to speak, $1 million was just enough for General Motors to get off scot-free.
The settlement with the U.S. Securities and Exchange Commission doesn’t call into question GM’s current or prior financial statements or disclosures. What’s more, SEC didn’t found any material weakness or significant deficiency. In layman’s terms, GM’s accounting during the ignition switch scandal is a-OK with the SEC. No wonder Lady Justice is pictured blindfolded.
Since the Securities and Exchange Commission started investigating General Motors in 2014, the automaker has reorganized its entire engineering teams and quality assurance processes. As per GM’s new way of conduct, suppliers are being looked over by General Motors to ensure that everything's alright.
As a brief refresher, Delphi produced the sub-standard ignition switches for GM. Considering that Delphi was birthed in 1994 by none other than General Motors, it’s up to you to decide who’s at fault for this series of events.
The latest development of the ignition switch saga sees General Motors accepting to pay a $1 million civil penalty. “$1 million? Not even a used Bugatti Veyron is that cheap,” you might be thinking, and you’re definitely right. But the United States Securities and Exchange Commission couldn’t get more out of General Motors for its wrongdoing, so that’s that.
Consenting to an administrative SEC Cease and Desist Order, however, doesn’t wash away GM’s malpractice. It actually favors the culprit, chiefly because General Motors is not obliged to deny or admit any misconduct. So to speak, $1 million was just enough for General Motors to get off scot-free.
The settlement with the U.S. Securities and Exchange Commission doesn’t call into question GM’s current or prior financial statements or disclosures. What’s more, SEC didn’t found any material weakness or significant deficiency. In layman’s terms, GM’s accounting during the ignition switch scandal is a-OK with the SEC. No wonder Lady Justice is pictured blindfolded.
Since the Securities and Exchange Commission started investigating General Motors in 2014, the automaker has reorganized its entire engineering teams and quality assurance processes. As per GM’s new way of conduct, suppliers are being looked over by General Motors to ensure that everything's alright.
As a brief refresher, Delphi produced the sub-standard ignition switches for GM. Considering that Delphi was birthed in 1994 by none other than General Motors, it’s up to you to decide who’s at fault for this series of events.
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