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General Motors Gets Independent Monitor

Deal for deferred prosecution calls for outside safety supervisor.

by on Oct.30, 2015

As part of its deferred prosecution agreement, GM is getting an independent monitor.

General Motors is getting one more safeguard as part of its revamp of its safety efforts: an independent monitor.

The automaker agreed to the appointment of federal monitor to oversee the company’s compliance with the terms of the “Deferred Prosecution” deal that it signed last month with U.S. Attorney’s office in the Southern District of New York in a bid to resolve legal issues stemming from the ignition-switch scandal that has now cost the company billions.

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Greg Glidden, GM executive vice president and general counsel, said the independent monitor, Bart Schwartz, will oversee GM’s compliance with the terms of the agreement announced Sept. 17. 

“We welcome Bart Schwartz and his insights, and we pledge our full cooperation and the same transparency and candor that has guided our response to the ignition switch recall,” Glidden said,

GM has also hired a new general counsel to work directly by the monitor appointed by the U.S. attorney to settle a criminal probe into the automaker’s handling of a faulty ignition switch lined to the deaths of 124 motorists.

(UAW scores health-care win on new GM pact. For more, Click Here.)

Mary Barra, GM’s chief executive officer, said the mistakes that led to the ignition switch recall should never have happened. GM has taken “unprecedented” steps to quiet the controversy around the faulty ignition switches, which GM officials deliberately hid from federal oversight.

“GM’s Board and leadership recognize that safety is a foundational commitment, and the changes the company has made in the last 15 months have made it much stronger,” noted GM Chairman Theodore Solso.

Under the agreement, the U.S. Attorney’s Office agreed to defer prosecution of GM related to the ignition switch defect and recall for three years. If GM satisfies the terms of the deal, federal prosecutors will then seek dismissal of the charges with prejudice.

(GM recalls 1.4 million vehicles due to fire hazard. Click Here to find out more.)

The agreement includes a requirement that GM cooperate with the federal government and establish an independent monitor to review and assess the company’s policies and procedures in certain discrete areas relating to safety issues and recalls. GM will also pay a $900 million financial penalty associated with this Agreement and will record a charge for this amount in the third quarter.

The consistent agreement with U.S. attorney states that the government’s decision to defer prosecution was based on the actions GM has taken to “demonstrate acceptance and acknowledgement of responsibility for its conduct.”

(Click Here for details about the new GM-UAW contract.)

GM has also fired 15 employees, who helped in covering up the problems created by the faulty ignition switch, following an investigation by outside counsel.

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