General Motors Punished for Hidden Ignition Switch Recall


Article by Brianna Panasiuk | esPResso Committee Member

In February 2013, General Motors recalled 2.6 million cars in order to repair defective ignition switches. GM failed to disclose the problems fast enough and were later fined a record $35 million.

Starting on June 6, 2014, CEO Mary Barra released the 315-page investigation of the recalls. During the process of the investigation, Barra says 15 employees were let go. According to Barra, there was a compensation fund for victims of the ignition defect, and GM began taking claims on Aug. 1, 2014.

According to attorney Kenneth Feinberg, the ignition defect was the cause of 124 deaths and 275 injuries. Each family of a deceased victim will receive $1 million. Fox news reported that in preparation for compensation, GM set aside $625 million.

On Sept. 17, 2015 announced that the ruling of the GM lawsuit will cost the company billions of dollars in punitive damages. CBS news reported “the GM settlement follows a $1.2 billion dollar deferred-prosecution deal reached between the Toyota Motor Corporation and Bharara back in March.”

Since the ignition switch recall, GM shares were down eight cents, or 0.2 percent, to $35.68 in mid-afternoon trading.

CEO Mary Barra does not want the company to forget about GM’s detrimental mistake. “I want to put this painful experience permanently in our collective memories,” she was quoted in hopes to prevent further damage to the company.

Photo credited by Wikimedia.


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