General Motors today reached a $120 million settlement with the attorneys general of 49 states and the District of Columbia to resolve claims that the automaker concealed safety issues related to ignition-switch-related defects in several of its vehicle models and model years.
In 2014, GM issued seven vehicle recalls concerning unintended key-rotation-related and/or ignition-switch-related issues, affecting over nine million vehicles in the United States. The recalls involved a defective ignition switch which, under certain conditions, could move out of the “run” position to the “accessory” or “off” position and cause the driver to experience a loss of electrical systems, including power steering and power brakes. If a collision occurs while the ignition switch is in the “accessory” or “off” position, the vehicle’s safety airbags may also fail to deploy, increasing the risk of serious injury or death in certain types of crashes in which the airbag was otherwise designed to deploy.
State attorneys general alleged that certain employees of GM’s predecessor, General Motors Corporation (which went through bankruptcy in 2009), knew as early as 2004 that the ignition switch was defective, and yet GM personnel did not inform the public and delayed making recalls until 2014. The attorneys general also alleged that GM continued to market the reliability and safety of its motor vehicles that were equipped with this defective ignition switch.
Under terms of the settlement, in addition to paying $120 million, GM shall:
Not represent that a motor vehicle is “safe” unless they have complied with the Federal Motor Vehicle Safety standards applicable to the motor vehicle at issue;
Not represent that certified pre-owned vehicles that GM advertises are safe, have been repaired for safety issues, or have been subject to rigorous inspection, unless such vehicles are not subject to any open recalls relating to safety or have been repaired pursuant to such a recall;
Instruct its dealers that all applicable recall repairs must be completed before any GM motor vehicle sold in the United States and included in a recall is eligible for certification and, if there is a recall on any certified pre-owned vehicle sold in the United States, the required repair must be completed before the vehicle is delivered to a customer.
“General Motors and other automakers should keep their customers’ safety at the forefront of everything they do,” Idaho Attorney General Lawrence Wasden said in a statement. “And when there is a problem, car companies must be transparent and act quickly. Automakers should recognize that if they fail in this regard, states will be ready to take action.” Idaho’s share of the settlement is just over $1.2 million.
The leadership team that worked on the case consisted of attorneys general from nine states: Maryland, Connecticut, Florida, Michigan, New Jersey, Ohio, Pennsylvania, South Carolina, and Texas.