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GM: Ignition Switch Victim Fund Paid Out Nearly $600 Mi

Total cost for scandal now tops $2 bil.

by on Dec.10, 2015

A replacement for the faulty GM ignition switches.

An independent victims’ fund set up by General Motors paid out nearly $600 million to settle 399 claims related to a faulty ignition switch, bringing to more than $2 billion the total amount of money the maker has spent as a result of a defect linked to more than 100 deaths.

The announcement came Thursday as the special fund began wrapping up operations. It had been set up on orders from Mary Barra, the then-new GM CEO, last year as part of a broader response to the maker’s extensive safety problems. GM has also had to pay out $900 million to settle a Justice Department criminal probe, and millions more in fines levied by the National Highway Traffic Safety Administration.

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But GM’s troubles are far from over. Not all of those offered settlements from the victims’ fund accepted, and they are among a number of others still set to have their day in court, with a series of trials set to begin in U.S. District Court in New York next month.


No More Major Safety Problems, Promises Barra

“We dug pretty deep,” CEO says.

by on Jun.10, 2014

GM CEO Mary Barra addresses shareholders.

General Motors CEO Mary Barra said she is relatively confident the maker won’t see a repeat of the problems that led to the long delay in recalling 2.6 million vehicles due to a defective ignition switch linked to at least 13 deaths.

Barra said GM is wrapping up its own internal review of safety-related problems – which have so far this year led to 32 separate recalls involving about 15 million vehicles. “We’ve been digging pretty deep,” she said, but the maker doesn’t see anything as serious as the ignition switch problem which has, among other things, triggered a Justice Department investigation and a record fine levied by the National Highway Traffic Safety Administration.

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“Seventy percent of the recalls involved products that are no longer in production,” noted Barra, who said GM’s own investigators have taken an extensive look at potential problems and the company’s employees have also come forward with information of potential issues.


GM Not Working with NASA on Ignition Switch Recall

Space agency would be open to assist – under specific conditions.

by on Apr.11, 2014

A 2007 Chevrolet Cobalt, one of the 2.6 million recalled GM vehicles.

Contrary to widely published reports, General Motors will not have the official assistance of NASA as it moves ahead with its internal investigation of the botched recall of 2.6 million vehicles equipped with faulty ignition switches, has learned.

Those reports, which included a story on this site, indicated that the space agency was being recruited to study whether it was safe to continue driving the recalled vehicles if a motorist removed the ignition key from their key ring.

Keeping the Record Straight!

The issue has become a critical one because a federal judge in Texas is currently considering a request to “ground” all 2.6 million GM vehicles covered by the recall until they can be repaired.

“NASA is not working with General Motors on its ignition switch issue,” the agency’s Deputy Associate Administrator for Communications, Bob Jacobs, said during a Friday interview.


GM Beginning Ignition Switch Repairs

Judge, meanwhile, considers grounding all recalled vehicles.

by on Apr.07, 2014

GM will begin installing replacement switches this week, but the full recall could take some time to complete.

General Motors plans to begin making repairs today on the first of 2.5 million vehicles recalled due to faulty ignition switches.

The repairs could take weeks, and possibly months, to complete, according to various industry sources, due to the limited availability of the replacement parts.  GM says the vehicles are safe to drive in the meantime – if drivers take the appropriate steps.

But a federal judge in Texas is weighing the possibility of grounding all 2.5 million of the vehicles and forcing the Detroit maker to offer owners loaner vehicles while the repairs are completed. A hearing on a request by an attorney suing GM was heard last Friday in a court in Corpus Christi, Texas, but U.S. District Judge Nelva Gonzales Ramos did not issue an immediate ruling.

Breaking News!

The recall was first announced in mid-February when GM said the ignition switches on nearly 800,000 vehicles could inadvertently turn off while being driven, stalling the engine and disabling power steering and brakes, and disabling the vehicle airbag system.  The maker shortly after doubled the total and boosted the numbers again a month later so that 2.6 million compact models are now covered.


GM’s Barra Vows Action at Congressional Hearing

CEO focuses on “Today’s GM” during testimony.

by on Apr.01, 2014

GM CEO Mary Barra testifies before the House Oversight and Investigations subcommittee today.

General Motors CEO Mary Barra’s spent much of her time during her testimony on Capitol Hill today saying GM was a different company now with a focus on safety.

“I would say, in general, we’ve moved from a cost culture since the bankruptcy to a customer culture,” she said, adding the focus on the customer includes ensuring GM vehicles are safe.

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Her hearing before the House Oversight and Investigations Subcommittee saw her pressed on a variety of issues related to the company’s recall of more than 2.5 million vehicles due to a faulty ignition switch, but it was more civil than the lambasting former GM CEO Rick Wagoner received when he testified before Congress several years ago. (more…)

GM Studying “Options” for Ignition Switch Victims’ Fund

GM takes heat at hearings from victims’ families, NHTSA officials.

by on Apr.01, 2014

Family members gather outside the Capitol on Tuesday to mourn victims killed in GM ignition switch crashes. Photo courtesy:

Even before General Motors CEO Mary Barra took the stand on Capitol Hill to begin the first of two days of testimony, the embattled maker was already taking a series of body blows from both federal safety regulators and the families of some of the 13 people known to have been killed due to defective GM ignition switches.

The maker also received a stinging letter from an assortment of consumer groups and advocates – including long-time GM critic Ralph Nader – demanding it set up a fund to cover “victims of GM product defects, whose legal rights were extinguished by GM’s 2009 bankruptcy.”

Beyond the Headlines!

The maker has responded by hiring Kenneth Feinberg – who oversaw victims’ compensation funds for the 9/11 attacks, the Boston Marathon bombing and the BP Gulf oil spill to “explore and evaluate options” for a compensation fund.


A GM Ignition Switch Recall Primer

A quick summary of the crisis to date.

by on Mar.17, 2014

29-year-old Brooke Melton was killed in a 2009 crash involving her 2005 Chevrolet Cobalt.

This story has been updated to note the cost GM expects to cover for its various recalls during the first quarter of 2014.

Recalls have become an almost every day norm in the automotive world.  Just over the weekend, for example, Honda announced a service action impacting almost 900,000 minivans sold in the U.S., and Chrysler recalled roughly 100,000 vehicles last week.  But the recall of 1.6 million General Motors vehicles last month has created shock waves throughout the industry – and headlines around the world.

It has already been dubbed “Switch-gate,” and generated Watergate-style questions about who knew what and when because of GM’s own admission it had warning signs that faulty ignition switches could cause vehicles to stall, and possibly crash, as early as 2001.

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With at least 12 deaths linked to the problem, a number of investigations are now underway that could see GM hammered with massive fines, possible civil and criminal charges, and class-action lawsuits claiming millions, perhaps even billions, in damages.

With new headlines popping up seemingly every other day, here’s a quick summary of the key dates, numbers and details:


GM Offers Loaners, Discounts to Owners of Recalled Cars

Maker urged to waive bankruptcy immunity.

by on Mar.12, 2014

GM offers $500 cash for owners of recalled models, like this 2007 Chevy Cobalt, to trade in.

This story has been revised to reflect the change in the total number of deaths associated with the faulty ignition switch, GM now saying it “double-counted” one fatality.

Even as Congress, the Justice Department and the National Highway Traffic Safety Administration launch investigations into the maker’s handling of a recall related to a faulty ignition switch, General Motors is offering to provide loaner vehicles to owners.  It also is offering a special $500 “allowance” for the purchase or lease of a new GM vehicle.

Meanwhile, the maker is coming under pressure to waive the immunity it received after emerging from bankruptcy in 2009 that might otherwise be used to avoid paying damages for product liability or wrongful death claims involving the 1.6 million vehicles covered by its February recalls. So far, there have been reports of 12 deaths and 31 crashes involving vehicles equipped with the defective switches. One safety advocate is calling for the maker to set aside a $1 billion fund to cover potential claims.

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“In keeping with our commitment to help customers involved in this recall, a special $500 cash allowance is available to purchase or lease a new GM vehicle,” said GM’s Alan Adler. The corporate spokesman stressed that the money is not to be used to promote GM sales but “only to be used to help customers in need of assistance.”


Justice Dept. Investigating GM Ignition Switch Recall

Criminal charges a possibility.

by on Mar.11, 2014

One of the recalled GM ignition switches.

The U.S. Justice Department is turning up the heat on General Motors, launching its own preliminary investigation into how and why the automaker delayed action involving faulty ignition switches catching blame for at least 13 deaths and 31 crashes.

The investigation will probe whether the GM might have violated criminal or civil laws requiring automotive manufacturers to advise federal regulators about potential safety problems in a timely manner.  A timeline supplied by the Detroit maker last month indicates it first became aware of the problem as much as a decade ago.

Beyond the Headlines!

The problem centers around an ignition switch widely used in a variety of compact GM models between 2003 and 2007.  It appears that when the vehicle is jounced around on a rough road, or if a motorist uses a heavy key ring, the switch can inadvertently turn from the On position to Off or ACC. In such a situation, a vehicle’s engine can stall and its airbags can be deactivated.


U.S. House and Senate to Hold Hearings on GM Ignition Switch Recall

“Significant questions need to be answered.”

by on Mar.11, 2014

29-year-old Brooke Melton was killed in a 2009 crash involving her 2005 Chevrolet Cobalt.

Committees from both the U.S. House and Senate will hold hearings into why it took General Motors a decade to recall 1.6 million vehicles equipped with faulty ignition switches – a problem now linked to 31 crashes and 13 deaths.

The announcements by the House Energy and Commerce Committee and the Senate Commerce Committee follow word that GM has hired two major law firms to conduct its own internal probe of the recall delay.

Breaking News!

The first indication of a problem was reported in 2004, according to documents already released by the Detroit maker, but a proposed fix was scuttled several years later.

Federal safety regulators are also taking heat, with critics contending the National Highway Traffic Safety Administration failed to press GM to respond as the number of complaints involving the switch problem escalated over the years to a current total of 260.