From the factory floor to the corporate suite, employees at General Motors saw indications of a deadly ignition defect and failed to disclose the problem to the government.
Yet even now that prosecutors are closing in on a criminal case against the automaker, their effort to charge individual employees at the center of the case has hit an obstacle: legal loopholes that the auto industry helped create. And while some G.M. employees still face investigation, the prospect of sweeping indictments across the company’s ranks has faded, according to people briefed on the investigation.
The prosecutors’ struggle centers on high legal standards and gaps in the oversight of carmakers, according to those people. The gaps, which do not exist in some other industries like pharmaceuticals and food, stem from nearly five decades in which the auto industry beat back efforts to strengthen criminal penalties.
In one prominent example, lobbyists and trade groups blunted a law requiring car companies to notify regulators of certain safety defects within five working days, persuading Congress to water it down so that it carries only civil penalties, not criminal liability. On at least three occasions, public records show, lawmakers tried to insert stronger criminal punishment into federal legislation, only to encounter fierce opposition from the industry.