GM Faces Large Fine in Criminal Probe over Deadly Ignition Defect Fiasco

Before the recent headlines about the Takata air bag recall, which became the largest in US history this month, General Motors dominated recall headlines over its recall of cars with faulty ignition switches – a defect that has led to numerous injuries and deaths.

New reports suggest further evidence has emerged that for more than a decade, General Motors knew that some of its small sized car models had faulty ignition switches, but only recalled them in 2014. About 2.6 million small cars worldwide, including the Pontiac G5, the Saturn Ion among, and many other cars, had ignition switches that could slip out of the “on” position, causing the cars to stall and disabling some important safety features like air bags. This serious defect has been tied to at least 104 deaths according to the Virginian-Pilot.

Quoting insiders, the New York Times reported that federal prosecutors have determined that GM failed to properly disclose the defects and misled regulators about the extent of the problem. There is also an ongoing investigation into whether GM committed fraud during its bankruptcy proceedings back in 2009 by not disclosing the defect. Even if a deal is reached between the government and GM, the automaker will still end up paying hefty fines that some observers speculate could exceed the $1.2 billion paid by Toyota, making the fines the largest levied against an automaker by the Justice Department. It’s worth noting that while the size of GM’s recall was smaller than the Takata air bag recall and affected fewer models, the number of deaths linked to GM’s faulty ignition switches is significantly higher.

GM has done everything it can to avoid losing money due to civil suits and government levied penalties. As of March 31, GM had paid $200 million to settle claims and GM officials say that number could soon rise to $600 million and eventually reach billions of dollars, eclipsing $1.2 billion Toyota paid last year due to widespread defects. Whatever its motives, GM has been more generous and understanding with the plaintiffs recently. GM’s lawyers have said each validated death claim would receive at minimum $1 million, regardless of the circumstances of the crash even if the victims contributed to causing the crash. The lawyers have also stated that there is no cap on the amount of compensation individual victims, who died or suffered extreme injuries like loss of limbs or paralysis, can receive.

GM’s willing cooperation with the investigation and the lawsuits has surprised many commentators. GM is probably trying to display a positive and proactive policy to a wider audience. Unlike Toyota which fought the entire process after a sudden acceleration problem was linked to 59 deaths, GM’s signs of goodwill could help reduce the penalties that will be levied against the corporation and help restore its tarnished image after a scandal laden year. More cynical commentators have suggested GM’s recall scandal may be a “buying opportunity.”

Ultimately, GM appears to be working hard to improve its public persona and to get the lawsuits behind it. However, it is hard to imagine GM will learn anything from this whole fiasco, despite the tough federal response, considering this incident is only the most recent example of GM recalling millions of cars with potentially fatal flaws. At this point it seems like GM is far more concerned with pushing the mess under the rug, than actually changing the culture of America’s biggest carmaker that allowed these defective cars to be sold in the first place.

If you have been injured in a car accident due to a flaw in your vehicle or the fault of another driver you should seek medical care and then call Cooper Hurley Injury Lawyers for a free consultation at 757.455.0077. When it really counts, count on Cooper Hurley.