GM Considers Compensation for Victims in Ignition-Switch Recall | Edmunds

GM Considers Compensation for Victims in Ignition-Switch Recall


Just the Facts:
  • General Motors has hired an attorney who managed the fund for victims of the 9/11 attacks and Boston Marathon bombing as it weighs whether to compensate families of those injured or killed in its recalled cars with defective ignition switches.
  • The company said it has retained Kenneth Feinberg as a consultant "to explore and evaluate options."
  • GM CEO Mary Barra told a House subcommittee meeting on Tuesday that Feinberg will assess "what are the appropriate next steps" because "we do understand we have civic responsibilities as well as legal responsibilities."

WASHINGTON General Motors has hired an attorney who managed the fund for victims of the 9/11 attacks and Boston Marathon bombing as it weighs whether to compensate families of those injured or killed in its recalled cars with defective ignition switches.

The company said it has retained Kenneth Feinberg as a consultant "to explore and evaluate options."

GM CEO Mary Barra told a House subcommittee meeting on Tuesday that Feinberg will assess "what are the appropriate next steps" because "we do understand we have civic responsibilities as well as legal responsibilities."

She also said: "I consider this to be an extraordinary event and we are responding to it in an extraordinary way. Bringing on Mr. Feinberg is the first step."

Barra said GM executives will meet with Feinberg on Friday and that he will spend 30-60 days advising GM on next steps. She told congressional investigators that, at this point, Feinberg has "not been given any ability to compensate victims."

GM has said that 13 people died in accidents with its recalled small cars with faulty ignition switches. The recall includes the 2005-'10 Chevrolet Cobalt. GM has recalled 2.5 million of its small cars for defective ignition switches.

"My mandate from the company is to consider the options for dealing with issues surrounding the ignition-switch matter and to do so in an independent, balanced and objective manner based upon my prior experience," said Feinberg in a statement provided by GM.

The recall could have implications for GM future product design, Barra suggested in her testimony.

She said the company is looking at installing push-button-start ignition "across the board" in its cars.

The House Subcommittee on Oversight and Investigations held the hearing to determine why it took a decade to announce the recall after "red flags and warning signs first surfaced," it said.

"The committee's findings so far suggest there were many missed opportunities over the years to identify the defect and protect drivers," the subcommittee said in a statement after the hearing. "While Barra apologized for the lives lost and the past safety failures, she was not able to provide answers on how and why action to fix the problems was not taken sooner."

The committee also questioned why the National Highway Traffic Safety Administration chose not to open an investigation after receiving complaints that airbags were not deploying in some GM small cars. The defective ignition switches can be bumped or jostled out of the "run" position, turning off the engine and disabling the car's power steering, power brakes and airbags.

"Documents revealed that the agency considered investigating airbags in Cobalts in 2007, but ultimately decided there was not a trend and did not pursue further action," the committee said.

A GM internal memo cited by the committee said none of the solutions to the defective ignition switches represented an "acceptable business case," when the problem first came to light.

Barra told the committee: "We in the past had more of a cost culture and now we're going to a customer culture."

Edmunds says: Congressional investigators say they will continue to look for answers to "ensure safety on the roads."

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