twitter google

GM On The Hook For $900 Millions In Ignition Switch Settlement


Due to an ignition switch error that resulted in 124 deaths, General Motors (GM) is being asked to pay a $900 million settlement to prevent facing any criminal charges in connection with the case.

MSN reports the settlement is a part of an agreement with the U.S. Department of Justice that is being called a ‘deferred prosecution’. Under the agreement GM will need to work along with an independent monitor, auditing corporate policies for up to three years. Some insiders speculate that GM was aware of the flaw well before they recalled the over 2 million cars that were affected. Meeting these auditing terms of the settlement after the three years (including $900 million dollar penalty), will allow the company to avoid charges of wire fraud and concealing facts regarding the ignition defect to U.S. Regulators.

Safety advocates are outraged with the decision. One, Ralph Nader, called GM a ‘homicidal fugitive from justice’, and referred to the U.S. federal government as ‘toothless’. While the recall affected other countries, the $900 million dollar settlement only applies to the company’s operations in the United States.

As a result of the incident, General Motors let go 15 employees and disciplined other staff involved, after a full internal investigation was completed. Interestingly enough, one GM safety inspector claimed he was worried about continually bringing the ignition issue to the attention of his Supervisor when he saw the switch error flaw; noting that other GM employees had been punished the past for standing up to authority figures.

The U.S. District Judge Alison Nathan, who participated in the proceedings, relayed that she reviewed the ‘heartbreaking’ cases that resulted in death, because of the defects; noting that any doubt around the criminality of the conduct can now be put to rest.