The Car and Truck Fleet and Leasing Management Magazine

GM Settles Criminal, Civil Ignition-Switch Cases

September 17, 2015

The defective ignition switches were installed in several GM models, including the Pontiac G5. Photo courtesy of GM.
The defective ignition switches were installed in several GM models, including the Pontiac G5. Photo courtesy of GM.

In a settlement with the U.S. Department of Justice, General Motors has agreed to pay $900 million and admit to misleading federal regulators and the public about defective ignition switches installed in millions of vehicles, according to a report from Reuters.

GM has also agreed to hire an independent monitor to oversee the company’s safety practices and reporting procedures, as part of a three-year deferred federal prosecution agreement, the news agency reported.

The independent monitor will also operate a phone line to allow employees and others to report safety violations anonymously.

If the settlement receives court approval and GM complies with all terms, federal prosecutors will drop related criminal charges. Settlement documents were filed in federal court, and an arraignment hearing is set for Sept. 17.

The ignition switches have been tied to 124 deaths.

“The mistakes that led to the ignition switch recall should never have happened. We have apologized and we do so again today,” said GM CEO Mary Barra in a released statement. “We have faced our issues with a clear determination to do the right thing both for the short term and the long term. I believe that our response has been unprecedented in terms of candor, cooperation, transparency and compassion.”

Additionally, the automaker announced it has settled certain civil cases also associated with 2014 recalls, including those involving defective ignition switches. Because of the settlements, GM said it will record a charge of $575 million in the third quarter.

One settlement resolves a shareholder class-action suit seeking damages for approximately 1,380 individual death and personal injury claimants, GM said.

“The parties to these agreements have resolved difficult claims without the burden, expense and uncertainty of litigation,” said Craig Glidden, GM executive vice president and general counsel, about settling the civil actions.

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