GM ignition switch compensation fund offered $595M – Detroit Free Press
General Motors offered nearly $595 million to surviving families of those killed and to 275 people injured in crashes that an independent compensation fund determined were caused by defective ignition switches in small cars built in the middle of last decade.
Slightly more than 90% of those offers were accepted, according the final report of the GM Ignition Compensation Claims Resolution Facility. The staff, led by well-known disaster compensation expert Kenneth Feinberg, reviewed 4,343 claims filed after Aug. 1, 2014.
Of 473 claims involving fatalities, 124 claimants were offered $1 million or more. All were accepted.
Another 280 claimants alleged they suffered life-changing injuries, such as brain damage and loss of limbs. Feinberg’s staff offered payments to 18 of those claimants, of which 16 accepted, one rejected and one remains outstanding.
The larger number of claims — 3,590 — were based on injuries that required hospital or outpatient treatment within 24 hours. The commission offered compensation to 257 of those claimants, of which 221 accepted and 36 rejected.
In a statement, GM said, “We faced the ignition switch issue with integrity, dignity and a clear determination to do the right thing both in the short and long term. It was fair, compassionate, generous and non-adversarial.”
In September, GM agreed to pay $900 million to settle a federal criminal probe into its handling of the defective ignition switch crisis. Separately, it has settled about 1,380 pending civil lawsuits stemming from a record number of vehicle recalls last year, including the ignition switch problem.
As a result of the criminal investigation settlement, GM took a $575-million charge against its third-quarter earnings.
Last year, the automaker paid the maximum $35-million fine the National Highway Traffic Safety Administration can levy for failing to report safety critical defects in a timely manner.
The effect of the defect was that the key could be nudged inadvertently from the “on” to the “accessory” position, cutting electrical power to the steering, air bags and other electrical features. The ignitions were installed in about 2.6 million cars build for the 2003-07 models years. Most were Chevrolet Cobalts or Saturn Ions, but other models such as the Pontiac G5, Saturn Sky and Pontiac Solstice were also recalled for the problem.
GM CEO Mary Barra fired 15 employees, including high-ranking attorneys and engineer Ray DeGiorgio, who told federal investigators he didn’t change the ignition-switch design although e-mails between him and employees of the switch manufacturer Delphi showed the part had been changed after the 2007 model year.
Victims’ own actions in operating the vehicles were not considered as long as there was evidence that the ignition switches malfunctioned.
The victim did not wear a seat belt in 55 of the fatal accidents. In 57 cases, the cars were moving well above the speed limits and in 32 accidents drivers were operating under the influence of alcohol or drugs. Four drivers had fallen asleep and three were cited for reckless driving. In all those cases, victims’ families were offered payments of at least $1 million.
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