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General Motors reaches settlement agreement with state attorneys general over ignition switches.

Posted in News

GM's Ignition Switches Cause Another $120 Million Loss
General Motors reaches settlement agreement with state attorneys general over ignition switches.

— General Motors is still financially answering for years of failures related to defective ignition switches that killed and injured hundreds of people.

In a settlement agreement with 49 states and the District of Columbia, GM agreed to pay $120 million that will be divided among the states.

The settlement follows years of deceit and the recalls of nearly 30 million vehicles in North America after GM admitted the ignition switch in a car could move out of the "run" position from bumpy roads, heavy key rings or a bump to the ignition key from a knee. This condition shuts down the car and leaves it without power steering and power brakes, and in some cases without power to the airbags.

Taking heat from consumers and safety regulators, the automaker created a compensation fund for consumers who said they were harmed by the defective switches. In the end, GM paid $595 million to cover 275 injuries and 124 deaths attributed to the switches.

Investigators learned that even after receiving a $49.5 billion government bailout to avoid completely losing its ass, the "New GM" continued the same corporate culture as the "Old GM." That culture allowed the ignition switch defects to exist and continue as GM's customers were killed and injured due to the switches.

In a report on the reasons why General Motors took 10 years to recall millions of cars with a safety defect, a former federal prosecutor found multiple examples of employees, engineers and management who ignored damning evidence of safety defects. The automaker went so far as to tell engineers to write reports without using certain words, such as ''defect" or "safety."

General Motors may be spitting out money because of years of failures concerning the ignition switches, but unlike some of its customers who went to jail because of the ignition switches, not one GM manager was charged and jailed in the deaths and injuries of hundreds of people.

The $120 million payout follows the $595 million to resolve death and injury compensation claims, about $575 million to settle other death and injury claims and a shareholder lawsuit and another $900 million to settle a government criminal probe.


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