GM sets no compensation cap for ignition switch victims

GMT 22:47 2014 Monday ,30 June

Arab Today, arab today GM sets no compensation cap for ignition switch victims

General Motors
New York - AFP

General Motors said Monday it will pay unlimited compensation for victims of car accidents tied to faulty ignition switches and added another round of massive vehicle recalls.
Facing possibly hundreds of death and injury claims for a problem the company covered up for more than a decade, GM offered an extensive compensation program for those killed or injured in accidents related to the defective switch in the 2.6 million cars recalled in February and March.
The leading US automaker said it would accept claims from the broadest possible victim population, including people who have already settled previous claims for the same problem.
Kenneth Feinberg, the compensation expert GM hired to organize payouts to victims, made clear that the minimum $1 million payout to the families of at least 13 people killed would be just a starting point for claims for economic losses and hardship.
"There is no ceiling on the aggregate dollars," he said.
Victims will be able to file for lost earnings and benefits over a prospective lifetime, and costs of special care needed by injured victims over a lifetime. Those could come to many millions of dollars apiece.
Hours after the announcement, GM issued six recalls totaling 8.4 million vehicles in North America -- 7.6 million in the US.
The bulk of them, 8.2 million, were being recalled for "unintended ignition key rotation" tied to three fatalities.
The latest announcement means the Detroit automaker has now recalled roughly 30 million vehicles so far this year.
The company raised its second-quarter charge for recall-related costs to $1.2 billion from $700 million, bringing the first-half charge to $2.5 billion.  einberg said GM would not hide behind its 2009 bankruptcy restructuring to protect it from liabilities.
"For accidents, the GM bankruptcy is no bar to filing a claim on this program," Feinberg said.
Even people who may have been texting or drunk in an accident that can be tied to the faulty ignition switch would be eligible.
 - Contributory negligence 'irrelevant' -
"This program is aimed at compensation for defective switches," Feinberg said.
He emphasized that no victim is compelled to join the program and those who do will still be able to sue the company separately for damages. Only once they accept a payout under the program would they give up the right to file further claims.
The breadth of the victim base, and so the total costs the automaker is facing, remained unclear.
Feinberg, who in the past has been involved in setting compensation for damages from the BP oil spill and the Boston marathon bombing, will have full authority to decide GM's payouts for death and injuries.
GM has so far publicly acknowledged 13 deaths in 54 accidents linked to the ignition switch defect, but federal safety officials suggest the toll could be higher.
The problem stems from faulty ignitions in several models of GM cars from the 2005-2012 model years. The ignitions could be jolted into "accessory" or "off" position while the car was running and turn off the power steering and, crucially, airbag deployment in a collision.
GM has admitted knowing of the problem for more than a decade before launching a recall of 2.6 million Chevrolet Cobalt, Saturn Ion and other cars in February.
The company is under both federal criminal and congressional investigations for hiding the problem for years.
In the base plan announced by Feinberg, for each eligible death claim, in addition to the minimum $1 million for the victim, $300,000 will be awarded for the surviving spouse and another $300,000 for each of the victim's surviving dependents.
Financial and medical treatment compensation of at least $20,000 will also be offered for those with eligible physical injury claims from an accident.
Compensation claims will be taken from August 1 through December 31.
But the compensation program does not cover claims for accidents in which an airbag deployed and/or the seatbelt "pretensioner" -- the device that removes slack early in a crash -- worked.
GM's chief executive Mary Barra, who took the company's top job just weeks before the ignition-switch recall began, welcomed Feinberg's plan.
"We are taking responsibility for what has happened by treating them with compassion, decency and fairness," Barra said in a statement.

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