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GM Pays $900M to Resolve Criminal Charges Over Fatal Ignition Switch Defect

General Motors, Inc. (GM) will pay $900 million to resolve criminal charges related to the ignition switch defect that is now linked to at least 124 deaths and numerous injuries. The auto manufacturer also announced that it has set aside an additional $575 million to resolve personal injury and wrongful death suits.

As previously discussed on this blog, the defective ignition switches can inadvertently slip into the “off” position, causing the vehicle to stall. When this occurs, various key safety systems can also lose power, such as air bags, power steering, and power braking. GM is facing product liability suits for failing to issue a recall until last year, although it was aware of the ignition switch defect for more than ten years.

The Department of Justice charged GM with concealing a potentially deadly safety defect from the National Highway Traffic Safety Administration (NHTSA), from the spring of 2012 through February 2014, and, in the process, misleading consumers concerning the safety of certain of GM’s cars. To resolve the charges, GM entered into a deferred prosecution agreement under which the company admits that it failed to disclose a safety defect to NHTSA and misled U.S. consumers. Under the agreement, GM will pay a $900 million fine and must consent to the appointment of an independent monitor to review and assess policies, practices and procedures relating to GM’s safety-related public statements, sharing of engineering data and recall processes.

Regarding the criminal penalty, Department of Transportation Secretary Anthony Foxx stated: “General Motors not only failed to disclose this deadly defect, but as the Department of Justice investigation shows, it actively concealed the truth from NHTSA and the public. Today’s announcement sends a message to manufacturers: deception and delay are unacceptable, and the price for engaging in such behavior is high.”

According to court documents, GM engineers knew before the defective switch even went into production in 2002 that it was prone to slip out of the “Run” position. However, the company elected to continue production and rejected a simple improvement to the head of the key that would have significantly reduced unexpected shutoffs at a price of less than a dollar a car. Even after GM linked the defective switch to airbag non-deployment in 2012, the automaker continued to conceal the safety defect. In 2014, the faulty ignition switch finally resulted in the recall of more than two million vehicles.

If you or someone you love has been seriously injured by a dangerous or defective motor vehicle, don’t hesitate to contact a San Diego product liability attorney at the Law Offices of Robert Vaage for a free consultation.