Weekly Recap: Auto execs face life in prison for recall delays under proposed legislation

Sat, 09 Aug 2014

The stiff punishments are part of broader transportation legislation, but clearly McCaskill has automakers in her sights.

Missouri Senator Claire McCaskill threw down the gauntlet this week, proposing a bill that could send auto executives to prison for life if they were found to have delayed a recall. She also wants to eliminate the limit for fines for auto safety violations, which are currently capped at $35 million.

The stiff punishments are part of broader transportation legislation, but clearly McCaskill has automakers in her sights. "Painful recent examples at Toyota and GM have shown us we also must make it easier to hold accountable those who jeopardize consumers' safety," she said in a statement announcing the bill.

The legislation, if passed, would give more teeth to federal laws and strengthen prosecutors' ability to pursue offenders. McCaskill, a second-term Democrat, noted that the current law's criminal provision has never been used by prosecutors. Even Toyota – which was slapped with a record $1.2 billion fine in March in its unintended acceleration case – was technically prosecuted for wire fraud, which allowed for a higher financial penalty than an auto safety violation. The possible life sentence for an executive could come into play if a company delayed a recall for a problem that caused a fatal accident.

It seems unlikely a CEO would be sent to the slammer for life, but this legislation must be sending shivers down the spines of executives, especially at Toyota and GM, which were mentioned directly by McCaskill. They're the most recent examples of high-profile recalls, though Ford, Audi, Hyundai and others have faced similar circumstances over the years.

The reaction from the industry has been muted, and spokesmen for industry advocacy groups, the Alliance of Automobile Manufacturers and the Association of Global Automakers, wouldn't comment on the legislation.

If this bill becomes a law, expect it to be enforced to the letter. McCaskill did a bit of grandstanding during GM's hearings earlier this year on Capitol Hill, but she's only responding to the mood of the country, which is fed up with safety issues, recalls and delays in fixing technical problems that can't be explained clearly. Expect this law to be broadly applied, and woe to the executive or company that's the first to be found negligent or to have stalled a recall – they'll bear the brunt of pent-up frustrations from Congress and the public.

Other News And Views

Cadillac is expected to debut its new flagship sedan next year.

This is exactly what Cadillac needs. Rumored to be called LTS, a large, rear-wheel-drive sedan with V8 power would finally offer legitimate American competition for the Mercedes-Benz S-Class and BMW 7 Series. Cadillac has shown it can compete with the Germans in midsize sedans and coupes, and there's no reason to doubt its capability to develop and build something bigger with the full weight of General Motors behind it. More than just physically larger, an S-Class fighter would signal Cadillac's intent to return to its former "Standard of the World" status.

Lost in the shuffle could be the XTS, which is an underrated sedan. Just because Cadillac makes an S-Class competitor, doesn't mean it needs to kill the XTS, though it probably will. It's hard to see the XTS (which is the only Caddy based on a front-wheel-drive chassis) surviving for long after the launch of a new flagship sibling, and Cadillac will need every available advertising dollar to position the new sedan properly.

Chevrolet and GMC announced pricing for their new Colorado and Canyon midsize pickup trucks.

The 2015 Chevy Colorado starts at $20,995 with destination, and the 2015 GMC Canyon begins at $21,880. These are really compelling prices. The trucks, which are still large vehicles with plenty of capability, are more than $5,000 cheaper than their fullsize brethren, the Chevy Silverado and the GMC Sierra.

The point here isn't to undercut their big brothers. Large truck buyers are among the most loyal in the industry, and if your job involves your truck, you won't be looking to downsize. But if you don't need the monster capability of the Silverado and Sierra on a daily basis, the Colorado and Canyon are attractive and economical options.

Bentley's new SUV development is charging ahead, as evidenced by spy photos this week.

Now that there's even a website dedicated to the first Bentley SUV, this recent round of spy shots isn't a surprise. We know it will be fast, opulent and as the pictures of these heavily cladded prototypes show, it will look unmistakably like a Bentley. The question then becomes: when the wraps come off, will this 'ute be accepted as a real Bentley? A good example was set by Porsche, which conceived the Cayenne and Macan SUVs as attractive and performance-driven options for enthusiasts who already owned its sports cars. A spokesman did not immediately respond to a request for comment, but look for Bentley to make its move at the Paris Motor Show this fall.

By Greg Migliore