Product News and Recalls

GM to Pay $900 Million over Ignition Switch Defect

GM to pay 900 million dollars in ignition switch settlementBloomberg reports that General Motors Co. has agreed to pay $900 million to the U.S. Justice Department over an ignition switch flaw linked to the deaths of at least 124 people.

Evidence suggests that GM was aware of the potentially fatal ignition switch defect as early as 2003, when it was reported by a Pontiac owner and demonstrated to officials. The flaw leaves the ignition key prone to dislodgment when the car is in motion, shutting off the vehicle and disabling airbags and power steering. The defect has been identified in 20 different GM models, including the Chevrolet Impala, Saturn Ion, and Buick Lacrosse. Investigation has revealed that the defect was noted in 2004 during a test drive of the Chevrolet Cobalt. A GM engineer recommended a fix to the problem, but the automaker reportedly turned it down, claiming it would cost too much to implement.

It was not until 2014 that GM finally began to recall vehicles with faulty ignition switches. Nearly 2.6 million GM cars were recalled over the course of the year. But the damage had already been done—over 120 lives are estimated to have been lost in GM ignition switch–related accidents. Individual claims filed by or on behalf of injured drivers and passengers are not addressed in the current payout, though GM officials say the company has reached a tentative agreement with up to 1,385 plaintiffs. In addition to these, GM still faces 370 injury cases and 84 wrongful death claims, which are expected to seek billions of dollars in damages from the company.

According to Bloomberg, the new $900 million settlement “is part of a deferred-prosecution agreement under which the U.S. will monitor some of the automaker’s safety policies and the company must cooperate with the government.” GM has been charged with conspiracy and wire fraud, but these claims may be dismissed after three years if the automaker complies with the terms of the agreement.

Were you or someone you know hurt in an accident involving a faulty GM ignition switch or other auto defect? If so, you may be eligible to receive compensation. Contact the attorneys at Lopez McHugh today to schedule a free legal consultation.