GM Switchgate scandal, Tesla Autopilot probe both wind down

January 20, 2017

Last week, Volkswagen and Takata reached major settlements with the U.S. government over their respective misdeeds, and many suggest that the timing--coming one week before the swearing in of Donald Trump as president--was no coincidence.

By most accounts, the companies wanted to finalize those agreements before Trump's team started punching the clock, which could have stalled or set back months or years of movement toward resolutions.

Within the past 48 hours, two more scores have been settled--one involving General Motors' faulty ignition switches, the other centering on Tesla's semi-autonomous Autopilot software.


Most of the investigations involving GM's ignition switches wrapped up in 2015. Back then, the automaker paid out $595 million in compensation to the families of 124 people killed by the devices and to the 275 people injured in crashes caused by them. GM also agreed to a massive, $900 million fine

However, one major probe remained--one involving the Securities and Exchange Commission. The SEC was investigating whether GM failed to account for the cost of the recall (and the attendant negative publicity) in its balance sheets during the early days of the scandal.  

Now, the company has agreed to pay a $1 million fine to settle the investigation. In doing so, though, GM won't be obligated to admit wrongdoing or rework its balance sheets from the period under investigation. 

While that sounds like good news for GM, the company isn't entirely out of the woods yet. Last summer, courts ruled that the "new GM" could be sued by plaintiffs for misdeeds carried out by pre-bankruptcy GM. Stay tuned for that.


Meanwhile, the National Highway Traffic Safety Administration has just ended its investigation of Tesla Motors. The agency launched that probe back in July, following a collision that killed a Tesla owner who was using the company's semi-autonomous software known as Autopilot at the time of the crash.

NHTSA has concluded that Autopilot wasn't to blame for the accident and that there was no defect, either in the software or in the Model S that Joshua Brown was driving at the time. The agency has confirmed that Mr. Brown was primarily responsible for the collision.

That said, Tesla didn't get off without a scolding. U.S. Transportation Secretary Anthony Foxx made it clear that automakers like Tesla need to explain the capabilities--and shortcomings--of self-driving and driver-assistance software to owners. And in the future, it's possible that automakers may be held liable for collisions if their software is proven to be deficient.

Lawyers for the Brown family said that they would review NHTSA's determination and evaluate whether or not to appeal. 

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