General Motors Ignition Switch Flaw Death Toll Rises To 169 Following Personal Injury Settlement; Penalty Costs Top $2.1B

The liability cost of General Motors’ handling of a dangerous small-car ignition switch defect has grown to $2.14 billion, according to the company. The total more than doubled after federal prosecutors and GM both announced Thursday separate settlements related to the safety lapse that is now linked to 169 deaths, up from 124.

The Detroit automaker said it will pay $575 million to settle a raft of civil lawsuits, including “more than half” of the personal injury complaints linked to the safety defect. The rest of the money will go to settle a separate class-action lawsuit from shareholders who say the company’s failure to disclose knowledge of the safety defects in a timely manner drove down the value of their shares.

Thursday’s announcements end a long federal investigation into GM’s handling of a fatal ignition switch flaw in 2.6 million Chevrolet Cobalts and other older small GM cars. The flaw causes the ignition key to slip out of the “on” position, cutting power to the vehicle's engine, steering, brakes and air bags.

Federal prosecutors said Thursday that GM will pay $900 million for the way it handled the recalls of the flawed vehicles dating back more than a decade. The announcement ends a U.S. government investigation into GM’s handling of the ignition-switch flaw.

Robert Hilliard, the attorney representing the 1,385 clients in the personal injury case, declined to say how much of the $575 million GM announced will go to his plaintiffs. “This is simply the first step. Each client will have the chance to review the settlement amount,” said Hilliard. “The process will take a while, but we’re hoping to get our clients their money by the holidays.”

“The parties to these agreements have resolved difficult claims without the burden, expense and uncertainty of litigation,” Craig Glidden, GM executive vice president and general counsel, said in a statement.

The personal injury settlement includes 45 people who were killed in GM cars that contained the ignition switch flaw, says Hilliard, which adds to the 124 deaths the company has acknowledged through its internal compensation fund as of Aug. 21. This tally doesn’t include pending litigation.

GM’s settlements were revealed hours before the U.S. Justice Department’s announcement Thursday of the $900 million penalty against the maker of Cadillacs and Chevrolets, the second-largest penalty against an automaker.

“For nearly two years, GM failed to disclose a deadly safety defect to the public and its regulator,” said U.S. Attorney Preet Bharara during a news conference at his office in Manhattan. “By doing so, GM put its customers and the driving public at serious risk.” In addition to the penalty, GM will also answer to an “independent monitor” who will review and assess policies, practices and procedures relating to its safety-related public statements, sharing of engineering data and recall processes.