IGNITION DEFECT
GM outlines crash-victim payments, adds to recall
7/1/2014WASHINGTON — General Motors is offering to pay as much as several million dollars each to the families of people killed and those severely injured in accidents caused by defective ignition switches installed in 2.6 million small cars under terms of a victims compensation fund announced Monday.
Lawyer Kenneth Feinberg, a compensation specialist hired by GM to design and administer the fund, said that for those who were killed or suffered catastrophic injuries such as paralysis, severe burns, or amputations because of the defect, the settlement would be based on their age, earning potential, medical expenses, and family obligations.
For a 10-year-old paraplegic injured in a crash caused by the defect, the fund is offering $7.8 million.
In less severe injuries, Mr. Feinberg said, settlements will be determined by the amount of time victims spent in the hospital or receiving medical treatment that began within 48 hours of an accident.
Payments for that category of injury will range from $20,000 for those hospitalized for one night to $500,000 for those who were in the hospital for 32 days or more.
Meanwhile, the automaker added 8.2 million more vehicles to its huge list of cars recalled over faulty ignition switches.
The latest recalls involve mainly midsize cars and bring GM’s total number of recalls this year to 28 million, more than the 22 million recalled last year by all automakers combined.
The latest recalls cover seven vehicles, including the Chevrolet Malibu from 1997 to 2005 and the Pontiac Grand Prix from 2004 to 2008. The recalls also cover the 2003-2014 Cadillac CTS.
GM said the recalls are for “unintended ignition key rotation.”
Chief Executive Officer Mary Barra said the recalls stem from a safety review within the company.
“We undertook what I believe is the most comprehensive safety review in the history of our company because nothing is more important than the safety of our customers,” Ms. Barra said. “Our customers deserve more than we delivered in these vehicles.”
The details of the compensation fund represent GM’s first definitive plan to compensate victims of the ignition-switch defect.
GM has admitted that company officials knew about troubles with the ignition switch for more than a decade before the company ordered recalls starting in February.
The defect caused cars to shut off, stiffening steering and brakes and causing air bags not to deploy.
Victim’s families who accept the payments could receive payments within 90 days after the fund begins accepting claims Aug. 1.
Victims who choose a track that would involve an analysis based on a more precise examination of their circumstances could expect their claims to be paid in six months, he said.
Mr. Feinberg said that GM has placed no cap on potential awards. He added that the automaker’s 2009 bankruptcy, which provides a legal shield against court claims from previous accidents, would not be a factor in his claims process.
GM has linked the accident to 13 deaths and 54 accidents, but the fund is expected to pay many more people involved in a broader scope of incidents.
Mr. Feinberg refused to speculate about the number of people who would receive compensation.
Those eligible for claims include the survivors of those killed or those injured in an accident — as well as passengers and pedestrians — caused by the faulty switch.