GM to pay $900M is exchange amnesty in deadly ignition switch case
General Motors has agreed to pay $900 million to settle a criminal investigation related to the company’s use of deadly ignition switches in its vehicles for more than a decade.
According to the Associated Press, GM will skirt all charges related to the ignition switch debacle if it complies with the government’s terms for oversight for three years. Neither GM nor U.S. prosecutors have confirmed the terms of the agreement, but an announcement is expected later on Thursday.
Interestingly, GM technically settled with the U.S. government on wire fraud charges. The AP speculates that prosecutors chose the wire fraud charge because GM communicated electronically with the National Highway Traffic Safety Administration about the defect.
GM has admitted that some of its employees knew about the deadly ignition switch defect more than a decade ago, but the Detroit-based automaker didn’t issue a formal recall until last year. The defective ignition switch — which can unexpectedly turn off, rendering a vehicle’s power steering and airbags inoperable — has resulted in at least 124 deaths and 275 injuries. Employees in the know aren’t expected to face any further criminal charges.
In addition to the $900 million fine, GM has set aside $625 million for people that accept a settlement with the company’s ignition switch fund. GM is also expected to face multiple lawsuits stemming from the ignition switch recall.
Despite the massive fine, some within the automotive community are not happy with the settlement.
“GM killed over a 100 people by knowingly putting a defective ignition switch into over 1 million vehicles,” Clarence Ditlow, executive director of the Center for Automotive Safety, told the AP. “Today thanks to its lobbyists, GM officials walk off scot-free while its customers are 6 feet under.”
GM’s fine isn’t as harsh as the $1.2 billion the Justice Department forced Toyota to cough up for concealing a problem with unintended acceleration a few years ago. At the time it was the biggest penalty ever levied against an automaker.