GM Close to Announcing Settlement Over Ignition-Switch Recall

Sept. 17, 2015

Sept. 17, 2015—General Motors is close to announcing a settlement to resolve a federal criminal investigation into its handling of a deadly ignition-switch defect blamed for more than 120 deaths and massive recalls nationwide, according to a report by USA Today.

GM would pay a penalty less than the $1.2 billion that Toyota paid for its handling of an unintended acceleration case.

The defect caused small cars to turn off suddenly when jostled, cutting off engine power and disabling airbags.

GM created an independently administered fund to examine all incident reports and offer settlements to victims. The fund, run by lawyer Ken Feinberg, has approved settlements for 124 families of victims who were killed and 275 who were injured, according to USA Today.

The settlement is not expected to include charges related to the company’s handling of its bankruptcy case.

In 2014, GM admitted that it had allowed the defect to go on for over a decade and paid a $35 million fine to the National Highway Traffic Safety Administration (NHTSA) for violating rules on recall reporting.

The ignition-switch defect triggered recalls of around 2.5 million cars.

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