Over 169 people have died as a result of the defective ignition switch in General Motors cars. Despite this, General Motors will pay $900 million to resolve criminal charges over its concealment of the ignition-switch but. No individuals from the company will be prosecuted. That’s quite a PR coup for the company but victims families are angry.
Court documents said even though the dangers became plain in the spring of 2012, the company did not correct its earlier assurance that the switch posed no safety concern.The statement of facts to which the company agreed in its deal with prosecutors describes in scathing terms GM’s deceitful and dismissive approach to handling a problem that was evident even before the defective switch went into production in 2002.
The agreement calls for two charges “wire fraud and scheming to conceal information from government regulators ” to be dropped after three years if the automaker cooperates fully.
The defective switches unexpectedly slipped out of the “run” position to “off” or accessory. That shuts off the engine and disables power-assisted steering, power brakes and the air bags.
GM announced it that it will spend $575 million to settle many of the civil lawsuits filed over the scandal.
The twin agreements bring to more than $5.3 billion the amount GM has spent on a problem prosecutors say could have been fixed at a cost of less than a dollar per car. Those expenses include government fines, compensation for victims and the recall and repair of the millions of affected vehicles.
As part of GM’s deal with prosecutors, an independent monitor will be appointed to review the automaker’s procedures for handling of safety defects.
When GM employees, the media and some customers complained about the switch in 2004 and 2005, the company’s engineers left the switch alone, rejecting a cheap and simple improvement that would have significantly reduced the problem, court papers said.
Last year, GM recalled 2.6 million older small cars worldwide to replace the faulty switches. Those included the Chevrolet Cobalt and Saturn Ion.
Jeffrey Newman represents whistleblowers.