General Motors CEO Mary Barra during a hearing on Capitol Hill on Wednesday.
Calling it “potentially precedent-setting,” a Seattle law firm has filed a class-action lawsuit against General Motors that could, it estimated, expose the automaker to damages of as much as $10 billion for economic losses suffered by owners of GM products.
At the heart of the case, the consumers-rights firm Hagens Berman Sobol Shapiro argues that owners of products such as the Chevrolet Cobalt sedan and sporty Chevy Camaro coupe not only paid more than they should have, but will get back less in trade-in, than they deserve as a result of the troubled Detroit automaker’s rapidly expanding list of safety-related recalls, which has grown to nearly 18 million vehicles this year alone.
The suit was filed on the same day GM CEO Mary Barra returned to Capitol Hill for hearings on the maker’s problems, in particular, the decade-long delay in recalling vehicles equipped with a faulty ignition switch linked to at least 13 deaths. GM also faces an investigation by the Justice Department that could lead to criminal charges and huge fines.
(For more on Barra’s return trip to Washington, Click Here.)
Keeping Things Honest!
But despite the breadth of its recall problems, and sometimes breathless headlines that has engendered, the new class-action lawsuit appears, at best, to rest on shaky data and emotional appeal. If anything, the numbers generally suggest that the maker’s ongoing recall problems have had little, if any impact on the sale of either its new or used vehicles, nor on the prices consumers have been willing to pay.