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GM will pay USD 900 million over ignition switch scandal

GM_6

New York :General Motors agreed to pay USD 900 million to fend off criminal prosecution over the deadly ignition-switch scandal, striking a deal that brought criticism down on the Justice Department for not bringing charges against individual employees.

The switches, which can slip out of the “run” position and cut off the engine, have been linked to at least 169 deaths.

Despite evidence that GM’s legal and engineering staffs concealed the problem for nearly a decade, no employees were charged, though US Attorney Preet Bharara said the investigation is still going on.

Also today, GM announced it will spend USD 575 million to settle the majority of the civil lawsuits filed over the scandal.

Under the deal with prosecutors, an independent monitor will be appointed to oversee GM’s handling of safety problems.

Two charges drawn up against GM wire fraud and scheming to conceal information from government regulators will be dropped after three years if the automaker cooperates fully.

GM agreed to a statement of facts that describes in scathing terms its deceptive and dismissive approach to the defect.

“They let the public down,” Bharara said. “They didn’t tell the truth in the best way that they should have to the regulators, to the public about this serious safety issue that risked life and limb.”

The twin agreements bring to more than USD 5.3 billion the amount GM has spent on a problem authorities say could have been handled for less than a dollar per car. Those expenses include fines, compensation for victims and the recall of millions of vehicles.

With the settlements, GM takes a big step toward moving past the scandal.

GM chief executive Mary Barra appeared before several hundred employees in suburban Detroit and again apologized to the crash victims. When asked whether employees should have been charged, she deferred to Bharara’s office.

But she added: “We understand that lives were impacted. That is something that we understand and we take forward and will have with us every day.”

The settlement brought bitter criticism from safety advocates and family members.

PTI