{"id":98876,"date":"2015-09-17T17:40:10","date_gmt":"2015-09-17T21:40:10","guid":{"rendered":"http:\/\/www.thedetroitbureau.com\/?p=98876"},"modified":"2015-09-18T08:26:38","modified_gmt":"2015-09-18T12:26:38","slug":"as-gm-closes-out-ignition-investigation-ceo-barra-says-maker-learned-its-lesson","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2015\/09\/as-gm-closes-out-ignition-investigation-ceo-barra-says-maker-learned-its-lesson\/","title":{"rendered":"As GM Closes Out Ignition Investigation, CEO Barra Says Maker Learned its Lesson"},"content":{"rendered":"
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GM CEO Mary Barra addresses a company town hall to discuss the ignition switch settlement.<\/figcaption><\/figure>\n

The U.S. Department has concluded a year-longer investigation into General Motors\u2019 handling of a deadly ignition switch defect with a settlement that requires the automaker to pay a $900 million fine. The maker separately negotiated $575 million settlement to conclude various civil suits related to the ignition switch issue now blamed for at least 124 deaths.<\/p>\n

The settlement was significantly less than many had expected. And federal investigators did not bring charges against anyone connected with the defect despite GM\u2019s acknowledgement that it waited a decade to deal with the problem. The Justice Dept. had extracted a $1.2 billion fine from Toyota Motor Co. last year to settle charges it had delayed action on defects related to unintended acceleration.<\/p>\n

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Breaking News!<\/figcaption><\/figure>\n

For her part, General Motors CEO Mary Barra told employees at a town hall meeting at the company\u2019s Vehicle Engineering Center in Warren, Michigan that GM had \u201clet (its) customers down.<\/p>\n

“We didn\u2019t do our jobs,\u201d she said, adding that, \u201c\u201cAs part of our apology to the victims, we promised to take responsibility for our actions,\u201d she said. So we accept the penalties being announced today because they are part of our being accountable.\u201d<\/p>\n

The settlement comes 19 months after GM announced the recall of 2.5 million vehicles equipped with a faulty ignition switch that could unexpectedly turn off. In such a case, a motorist could lose control and, if the vehicle crashed, its airbag system would fail to operate.<\/p>\n

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The opening page of the Justice Dept. complaint against GM.<\/figcaption><\/figure>\n

The recall was announced barely two months after Barra became GM\u2019s first female CEO and was an immediate test of her management and integrity. She quickly created a new post, appointing a safety czar with broad powers and reporting directly to the CEO. By the end of the 2014, GM had ordered more than 70 different recalls covering over 30 million vehicles \u2013 a major reason why total 2014 recalls for the industry doubled the previous record.<\/p>\n

Barra also ordered the creation of a special victims\u2019 compensation fund, appointing lawyer Kenneth Feinberg \u2013 who previously handled funds for 9\/11 and BP oil spill victims. The program wrapped up a month ago after determining 124 deaths were linked to the ignition switch defect.<\/p>\n

(Victims\u2019 fund wraps up; rejected 91% of claims. <\/em>Click Here<\/a> for details.)<\/em><\/strong><\/p>\n

GM committed $625 million to cover costs related to the fund. But after factoring in the Justice Department agreement, civil lawsuit settlements and a $35 billion fine levied by the National Highway Traffic Safety Administration, the ignition switch debacle has so far cost GM around $5 billion. And the cost could continue to climb with additional litigation. A number of states attorneys-general are continuing their own ignition switch probes.<\/p>\n

\u201cI have said many times how sorry I am for what happened. On behalf of all of us, I have apologized to the families who lost love ones and to those who were injured. I do so again today,\u201d Barra said during the GM town hall meeting.<\/p>\n

While Barra apologized, U.S. Attorney Preet Bhahara defended the settlement during a news conference in New York. Justice leveled two felony counts against the automaker for fraud and for misleading regulators. But it agreed to defer potential prosecution for three years \u2013 a similar move to what was included in the Toyota settlement in March 2014. So, while GM did not legally acknowledge guilt it will be on probation for those three years, prosecutors and regulators closely watching how it handles other safety issues.<\/p>\n

(US highway deaths heading for 8-year high, warns NHTSA. <\/em>Click Here<\/a> for more.)<\/em><\/strong><\/p>\n

The most controversial aspect of the agreement was the decision not to prosecute any individuals connected with the delayed recall. GM had itself fired 15 employees as a result of its own internal investigation last year.<\/p>\n

“GM killed over a 100 people by knowingly putting a defective ignition switch into over 1 million vehicles,” said Clarence Ditlow, a long-time critic of the industry and head of the Washington-based Center for Auto Safety. “Today thanks to its lobbyists, GM officials walk off scot-free while its customers are 6 feet under.”<\/p>\n

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The entire GM replacement ignition module - which will now include the lock cylinder, too, to prevent inadvertent rollaways.<\/figcaption><\/figure>\n

For his part, Bharara stressed \u201cWe\u2019re not done.\u201d The investigation will continue, he said, adding that \u201cIf there is a criminal case to bring, we will bring it.\u201d<\/p>\n

Bharara also said the investigation has sent a message to the rest of the auto industry that safety matters and that manufacturers face serious penalties if they ignore the rules. NHTSA, meanwhile, has increased its own scrutiny of the industry after coming under fire for not catching the ignition switch issue earlier.<\/p>\n

GM still faces a multitude of other investigations and lawsuit. The civil settlement only cover about 60 % of the multi-district litigation the maker was facing, and doesn\u2019t resolve the various state investigations.<\/p>\n

(Takata ignition switch problems could grow worse. <\/em>Click Here<\/a> to find out why.)<\/em><\/strong><\/p>\n

Meanwhile, the U.S. Securities and Exchange Commission and the Federal Trade Commission are also continuing their own probes, Barra noted, concluding, \u201cIt\u2019s not possible to estimate the remaining exposure.\u201d<\/p>\n

(Joe Szczesny contributed to this report.)<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

GM has reached a deal with the US Justice Dept to settle the ignition switch investigation. It will pay $900 mil and go on three years of probation. The controversial settlement does not charge any individual, but the probe will continue — as will GM’s other problems, reports TheDetroitBureau.com.<\/p>\n","protected":false},"author":2,"featured_media":98877,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[8],"tags":[],"make":[],"post-state":[],"category_old":[151],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/98876"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=98876"}],"version-history":[{"count":0,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/98876\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/98877"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=98876"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=98876"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=98876"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=98876"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=98876"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=98876"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}