General Motors will pay $900 million to settle criminal charges related to its flawed ignition switch that has been tied to at least 124 deaths.
Advertisement
Consumer advocate Clarence Ditlow, executive director of the nonprofit Center for Automotive Safety, bitterly criticized the settlement.
The news comes as the U.S. Attorney’s Office in Manhattan is set to announce an agreement with GM to settle a criminal investigation into the case.
Outrage over the GM ignition switch case prompted a much tougher approach by Washington toward auto safety issues and compelled automakers to act more quickly and comprehensively to recall vehicles with potentially dangerous defects.
The ignition switches on Chevrolet Cobalts, Saturn Ions and other GM vehicles could cause their engines to stall, which in turn prevented air bags from deploying during crashes.
Texas attorney Bob Hilliard represented 1,385 plaintiffs with death or injury claims who decided not to seek compensation from the fund. On Thursday, GM said it has agreed to spend part of $575 million to settle those lawsuits, which include 45 deaths.
GM was the world’s top-selling automaker for seven decades before being overtaken by Toyota in 2008.
In settling with the government, GM entered into a three-year deferred prosecution agreement that requires an independent monitor to oversee its practices, including its ability to fix defects and handle recalls. Fifteen GM employees were dismissed after the report. GM CEO Mary Barra termed the delay a “fundamental failure” after a probe found “a pattern of incompetence and neglect” through the company. In all, many millions of cars are affected across six brands in the US alone.
No individuals would be charged in the criminal case, one of the sources said. She said she felt like she was in mourning again and called the financial penalty a “slap on the wrist”.
It is less than the US$1.2 billion that Toyota Motor Corp agreed in March 2014 to pay to resolve a similar case alleging that its vehicles accelerated without warning.
Advertisement
GM also recalled more than 30 million vehicles in North America in 2014 to fix a wide array of defects.
