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GM Agrees to Pay $900 Million for Faulty Ignition Switches

September 18th, 2015

Car maker General Motors has agreed to pay $900 million for sitting on information and failing to tell regulators about a faulty ignition switch. The defect is believed to be linked to more than 124 deaths. This settles litigation by families of the victims. And by admitting criminal wrongdoing, it also settles a criminal investigation by the Justice Department.

The investigation showed that GM knew that ignition switches in some of their cars would turn off, cutting power to the car and disabling the air bag system. GM knew of the switch’s problems as early as 2002, but continued to keep the cars in production…despite knowing about deaths and serious injuries for a decade. In addition, the company hid the problems from the National Highway Traffic Safety Administration (NHTSA).

According to an article in the Wall Street Journal:

U.S. District Judge Alison Nathan approved the deal during a hearing later Thursday in Manhattan federal court. Judge Nathan said she read the “heartbreaking” accounts of deaths caused by the defects in documents prosecutors submitted.

“If there’s any doubt to the criminality of the conduct, that doubt is put to rest today,” Judge Nathan said.

This settlement, although it sounds high, is much lower than the $2 billion experts had predicted.

Laura Christian, whose daughter died in a 2005 crash of a Chevrolet Cobalt equipped with the faulty switch, said “monetary fines are grossly inadequate and will never serve as a serious deterrent to corporations.” But, she added “jail time will.”

But it doesn’t look as though criminal charges will be brought against any individuals. GM will face continued auditing of safety practices, both from the Justice Department and regulators.

“The worst part about this tragedy is that it was entirely avoidable,” said Christy Goldsmith Romero, the special inspector general for the government’s troubled asset relief program that aided auto makers during the financial crisis. “GM could have significantly reduced the risk of this deadly defect by improving the key design for the less than $1 per vehicle.”

Stories like this highlight why we, at HensonFuerst Attorneys, do what we do. It’s why we remain vigilant in trying to keep our clients safe, and in helping them seek justice if they have been injured by defective products and automobiles.

If you have been injured by a defective product, please feel free to call us at 800-4-LAWMED, or visit our website at lawmed.com for more information. If you have questions, HensonFuerst has answers.