GM to pay $146 mln penalty as 5.9 mln old vehicles emit excess carbon dioxide

General Motors will pay nearly $146 million in penalties to the federal government because 5.9 million of its older vehicles do not comply with emissions and fuel economy standards.

The National Highway Traffic Safety Administration said in a statement Wednesday that certain GM vehicles from the 2012 through 2018 model years did not comply with federal fuel economy requirements.

The penalty comes after the Environmental Protection Agency said its testing showed the GM pickup trucks and SUVs emit over 10 per cent more carbon dioxide on average than GM's initial compliance testing claimed.

The EPA says the vehicles will remain on the road and cannot be repaired. The GM vehicles on average consume at least 10 per cent more fuel than the window sticker numbers say, but the company won't be required to reduce the miles per gallon on the stickers, the EPA said.

“Our investigation has achieved accountability and upholds an important program that’s reducing air pollution and protecting communities across the country," EPA Administrator Michael Regan said.

GM said in a statement that it complied with all regulations in pollution and mileage certification of its vehicles. The company said it is not admitting to any wrongdoing nor that it failed to comply with the Clean Air Act.

The problem stems from a change in testing procedures that the EPA put in place in 2016, GM spokesman Bill Grotz said.

Owners don't have to take any action because there is no defect in the vehicles, Grotz said.

“We believe this voluntary action is the best course of action to resolve the outstanding issues with the federal government," he said.

The enforcement action involves about 4.6 million full-size pickups and SUVs and about 1.3 million midsize SUVs, the EPA said. The affected models include the Chevy Tahoe, Cadillac Escalade and Chevy Silverado. About 40 variations of GM vehicles are covered.

GM will be forced to give up credits used to ensure that manufacturers' greenhouse gas emissions are below the fleet standard for emissions that applies for that model year, the EPA said. In a quarterly filing with the Securities and Exchange Commission, GM said it expects the total cost to resolve the matter will be $490 million.

Because GM agreed to address the excess emissions, EPA said it was not necessary to make a formal determination regarding the reasons for the excess pollution.

But David Cooke, senior vehicles analyst for the Union of Concerned Scientists, questioned how GM could not know that pollution exceeded the initial test by more than 10 per cent because the problem was so widespread on so many different vehicles. “You don’t just make a more than 10 per cent rounding error," he said.

Dan Becker, director of the Safe Climate Transport Campaign for the environmental group Center for Biological Diversity, said the violations by GM “show why automakers can’t be trusted to protect our air and health, and why we need strong pollution rules. Supreme Court, take notice!"

In similar pollution cases in the past, automakers have been fined under the Clean Air Act for such violations, and the Justice Department normally gets involved, Cooke said. Hyundai and Kia, for instance, faced Justice Department action in a similar case.

The Justice Department declined to comment, and GM said the settlement resolves all government claims.

Cooke said it’s possible that GM owners could sue the company because they are getting lower gas mileage than advertised.

In 2014, Hyundai and Kia entered into a settlement in which they had to pay a $100 million civil penalty to end a two-year investigation into overstated gas mileage on window stickers of 1.2 million vehicles.

The affiliated Korean automakers denied allegations that they violated the law. Hyundai blamed the inflated mileage on an honest misinterpretation of the EPA’s complex rules governing testing.

In 2015, Volkswagen admitted it intentionally rigged nearly half a million cars to defeat U.S. smog tests.

The German company admitted that it intentionally installed software programmed to “defeat" emissions testing, enabling cars to drive more powerfully on the road while emitting as much as 40 times the legal pollution limit. The scandal cost Volkswagen more than $30 billion in fines and settlements and saw two U.S. executives sent to prison.

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