Massive Fine Against GM For Ignition Defect Fraud Announced

Ignition Switch -- GM, G.M., General Motors

Deferred Prosecution Is Hardly Justice for the Crash Victims

General Motors has reached a $900 million settlement with federal prosecutors on criminal wire fraud charges. The criminal charges stem from the company’s willlful coverup of the ignition switch flaw that killed at least 124 people, injured hundreds more, and caused the largest recall in automotive history.

However, the GM deferred prosecution agreement means the company does not have to plead guilty to the charges, which was a bonus for GM officials. And the settlement falls short of the record of $1.2 billion paid by Toyota for concealing the unintended acceleration of its vehicles. 

Individual Employees Go Untouched

No GM employees will face criminal charges for their part in hiding the dangerous ignition switch problems. Instead, the FBI found that “the problems stemmed from a collective failure by the automaker,” according to the New York Times


GM Only Cooperated After the Company Got Caught

Although the deferred prosecution agreement is not exactly a sweet deal, it is a better deal than GM executives imagined. Insiders anonymously told the NYT that GM was shown leniency because of the company’s cooperation with the Justice Department investigation. 

But the company only started cooperating after it was sued by plaintiffs lawyers and got caught. Executives and engineers at the company knew about the fatal flaw but actively concealed it for over 10 years. 

Even then, the company initially hemmed, hawed, kicked and screamed about recalling its vehicles and only reluctantly took the dangerous vehicles off the market. As the death toll mounted, the company tried to get out of paying the victims through bankruptcy proceedings. 

Just in the second quarter of this year, GM earned a profit of $1.1 billion. Its sales are booming, especially in the profitable SUV market. No doubt that this fine will just be a ripple on its corporate balance sheet and just be “business as usual.”

Two U.S. senators said that the fine was not sufficient punishment to the corporate giant.

No doubt that the families of the 124-plus people who died and the thousands who were injured would agree.

Related Posts:

G.M. Ignition Switch Deaths Tops 100 – Not 13 As First Claimed 

Judge Rules G.M. Is Shielded from Defective Switch Lawsuits

Will G.M. Refuse To Pay Victims In Recall Lawsuits?

G.M. Ignition Switch Trial Date Set

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