Stratton announces $1 million fine for GE.

In one of his first official actions, CPSC Chairman Stratton announced that General Electric Co. (GE) had agreed to pay a one million dollar civil penalty for allegedly failing to report to CPSC in a timely manner a defect in certain models of its dishwashers.

Monitor readers will recall that in December 2000, after many months of negotiations, CPSC's then-chair Ann Brown announced that GE agreed to settle the Section 15 lawsuit brought by CPSC alleging a fire hazard with the dishwashers. (2)

Despite the fact that many of the appliances were nearly 18 years old, CPSC forced GE to offer free service to consumers who still have them. Originally, GE had offered consumers a rebate on a new model dishwasher instead of a repair.

The civil penalty being paid by GE was imposed for its failure to report such defects in a timely manner to CPSC, as is its obligation under law. CPSC claims that by the time GE reported to CPSC, it knew of 111 incidents involving fire, smoke or melting of the heat/dry switches on certain models of its dishwashers. GE manufactured 3.1 million of the appliances between 1983 and 1989.

In announcing the penalty Stratton said that "[W]e intend to enforce these [reporting] requirements vigorously and there will be serious consequences for companies that fail to report such information quickly. The Commission will investigate and seek penalties against those who violate federal safety laws." (3)

While the Monitor supports enforcement of the reporting requirement, we note that penalties of this magnitude, following on the heels of a forced free repair to aged appliances, are industry costs that can only be passed along to the consuming public.

(2) CPSC Monitor, Vol. 5, Issue 12, December 2000, "CPSC and General Electric Settle Dishwasher Case."

(3) CPSC News Release # 02-225, Aug. 8, 2002, "GE Agrees to Pay $1,000,000 Fine for Delay in Reporting Product Defect to CPSC."