GM to Pay $900 Million for Ignition Switch Fiasco

GM ignition switchGeneral Motors (GM) has been ordered to pay $900 million for their defective ignition switch scandal. For almost ten years, they covered up the reality that switches could slip out of place and cut power to the engine. These faulty switches resulted in 124 deaths and 275 injury claims, leaving victims’ families to wonder why no individual employees were arrested.

Preet Bharara, U.S. Attorney, says that an investigation is ongoing. The settlement includes the appointment of an independent monitor to check how GM handles safety issues. After three years, wire fraud and scheming, two charges brought against GM, could be dropped altogether if General Motors cooperates in full.

Additionally, GM will pay $575 million to settle most of the civil suits that were initiated regarding the defective ignition switch. According to the auto manfacturer, they settled approximately 1,400 cases. Last year, a compensation fund was created for victims and victims’ families.

While victims’ families and safety advocates are not pleased with the settlement, Bharara stated that he understands why victims’ families may be displeased because no individuals were arrested. However, he says there is not a law that specifies criminal penalties for failing to confide auto safety issues.

The GM settlement was reached a year after Toyota paid $1.2 billion in penalties because of not releasing information about unintended acceleration that could cause injuries or death.

The scandal is not over yet. More than 400 injury and fatality cases remain to be settled.

GM changes involve the appointment of a new safety chief and the addition of 35 product safety investigators. More tests on vehicle parts are being conducted by GM and they are using aerospace industry standards.

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