GM Reaches $120 Million Ignition-Switch Settlement With State Attorneys General
October 19 2017 - 2:46PM
Dow Jones News
By Mike Spector
General Motors Co. has agreed to pay $120 million to settle a
state attorneys general probe of its mishandling of an
ignition-switch defect, the latest financial hit to the Detroit
auto giant over a safety crisis linked to numerous deaths and
injuries.
GM's agreement, disclosed Thursday, settles consumer-protection
investigations with 49 states and Washington, D.C., stemming from
the faulty switch, which can slip from the run position and cut
power in millions of older cars, disabling safety features
including air bags. The defect has been linked to 124 deaths.
The U.S.'s largest auto maker said it had "reached a
constructive resolution" with the state attorneys general that, in
addition to the payment, "assures GM will continue ongoing
improvements made to ensure the safety of its vehicles."
State attorneys general alleged GM failed to disclose the safety
defect in a timely manner and misled consumers when marketing
vehicles.
"Instead of prioritizing customers, General Motors turned a
blind eye for years and chose to conceal the safety defects
associated with several models of their vehicles," New York
Attorney General Eric Schneiderman said.
GM has acknowledged failing to recall about 2.6 million older
vehicles with defective switches until early 2014 despite having
internal evidence of a safety problem for at least a decade.
The settlement also addresses additional GM recalls that
involved unintended rotation of ignition switches. In all, the
settlement covers seven GM recalls in 2014 affecting more than nine
million vehicles, multiple state attorneys general said.
GM, which has admitted to the safety failure and undertaken
reforms, previously reached settlements with the U.S. Justice
Department, shareholders and thousands of consumers totaling more
than $2 billion.
GM agreed in September 2015 to pay $900 million to settle the
Justice Department probe, which resulted in prosecutors charging
the auto maker with criminal wire fraud and scheming to conceal a
deadly safety defect from U.S. regulators. The company entered a
deferred prosecution agreement, under which the government will
seek to later dismiss the case if GM abides by the deal's
terms.
Write to Mike Spector at mike.spector@wsj.com
(END) Dow Jones Newswires
October 19, 2017 14:31 ET (18:31 GMT)
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