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GM’s Recall Was Too Little Too Late
General Motors recalled hundreds of thousands of cars due to their faulty ignition, but was it too late? The death toll tied to faulty ignition switches in General Motors’ small cars has risen to 19, according to a compensation expert hired by the company. That number is likely to rise.
Kenneth Feinberg determined 19 wrongful death claims are eligible for payments from GM; the company’s estimate of deaths has remained at 13 for months, although the automaker acknowledged the possibility of a higher count.
Feinberg received 125 death claims due to the faulty switches in older-model small cars such as the Chevrolet Cobalt. The rest remain under review or require further documentation, he said in a report issued Monday.
“The public report is simply reporting on those eligible to date,” Feinberg spokeswoman Camille Biros said in an email. “There will certainly be others.”
GM has admitted to knowing about the ignition switch problem for over a decade, though it didn’t begin recalling the switches in 2.6 million small cars until earlier this year. The automaker hired Feinberg to compensate victims of crashes caused by the switches, and Feinberg has said GM has not limited the total amount he can pay.
Some lawmakers have estimated the death toll is closer to 100.
Biros, citing confidentiality agreements, said Feinberg will not identify any of those eligible for payments, nor will he say if the 19 deemed eligible include the 13 deaths that GM has documented. GM has not identified the 13 victims; the U.S. National Highway Traffic Safety Administration says it has not tallied the total number of deaths.
Biros said no claims have been rejected yet, although Feinberg is in the process of turning down a few because they don’t meet the requirements for compensation. Feinberg will issue reports each Monday on how many claims have been granted, she added.
Feinberg also has received 320 claims for compensation due to injuries. Of those, 12 have been deemed eligible for payments so far.
Of the injury claims, 58 were in the most serious category, seeking compensation for injuries resulting in loss of use of limbs, amputation, permanent brain damage or pervasive burns, the Feinberg statement said. Another 262 claims are for less-serious injuries that required hospital stays or outpatient medical treatment within 48 hours of the crash. Will GM be able to get out of this without it affecting their brand?
GM Settles Recall Lawsuit
GM was told to settle. A federal judge told lawyers on Monday he’ll encourage settlements in lawsuits brought on behalf of nearly 1,000 plaintiffs against General Motors for defective ignition switches.
U.S. District Judge Jesse M. Furman told dozens of lawyers at a hearing that he’ll be careful not to interfere with the work of a bankruptcy judge who is deciding if the Detroit-based automaker’s 2009 bankruptcy protects it from economic damages claims.
Furman said he wanted to be “sensitive about stepping on the toes” of the bankruptcy judge but planned to advance the litigation as much as possible nonetheless.
He made introductory remarks at an initial hearing after he was chosen to preside over more than 100 lawsuits that were consolidated in New York because of their common attributes. He said he planned “to encourage settlement as much as possible” once any potential payouts were better defined after rulings by the bankruptcy court.
Lawsuits were filed after General Motors Co. in February began recalling 2.6 million of the cars, mainly Chevrolet Cobalts and Saturn Ions. GM has acknowledged knowing that the switches in its small cars had problems since at least 2001. Federal law requires automakers to report safety defects to the government within five days of discovering them.
The ignition switches, when jostled, can shut off the engine, cutting power steering and brakes and potentially causing drivers to lose control. The problem also can disable air bags.
GM says at least 13 people have died in 54 crashes linked to the problem, while lawyers suing the company say the death toll is more than 60.
In May, federal safety regulators ordered General Motors to pay a record $35 million fine for failing to disclose the ignition switch defect in millions of cars for more than a decade.
GM attorney Richard C. Godfrey told Furman that 983 plaintiffs had filed 109 lawsuits, with about a dozen of the lawsuits making personal-injury claims while the rest were solely for economic losses.
Owners of the 2.6 million small cars that were recalled are eligible for compensation from a fund being administered by compensation expert Kenneth Feinberg on GM’s behalf. Feinberg, who handled claims for the BP Gulf Oil Spill and the Sept. 11, 2001, terrorist attacks, has said GM has placed no limit on the amount of money he can spend to compensate anyone who was injured or killed. The money won’t bring these people back, but it may help the family.