Mark Linnhoefer – Automotive giant General Motors is set to sign an agreement with the US government and pay $900 million to end a federal investigation into the way the company handled a serious problem with faulty ignition switches that led to numerous deaths.
The multinational automaker has been under investigation since at least March 2014 for the disclosures made in regard to cars equipped with faulty switches. GM’s reports to regulatory institutions have allegedly not been pointing out the accurate number of cars and magnitude of the problem. Dishonesty with regulators is a federal offence, and as such an investigation is currently underway.
In order to stop the investigation, GM will be paying a settlement of $1 million to the families of the 124 who died and 275 who were injured as a result of the company’s negligence. The auto-giant will also be paying $900 million to the US government.
The fault with the ignition switches causes them to stay in the “on” position, which causes the engines to stall and thereby hinders deployment of the airbags, power steering, and power brakes. GM has received over 200 civil suits in response to this issue and over 4300 claims in its out-of-court settlement system, of which at least 400 are eligible for compensation payments.
Although no actual person will be charged with anything, this settlement marks the end of a very laissez-faire relationship that regulators and automobile companies used to have, albeit the sum paid being less than Toyota had to pay in a similar case, Democratic Senator Richard Blumenthal is “very hopeful” that “the Department of Justice will hold GM fully accountable”.