General Motors agreed to pay $900 million over the Ignition Switch Scandal
General Motors has agreed to pay $900 million to avoid criminal prosecution over the deadly ignition-switch scandal. As this deal was struck it brought harsh criticism down on the Justice Department for not bringing criminal charges against the individual employees involved.
The switches, which are known to slip out of the run position and cut off the engine, have been linked to over 170 deaths.
Despite evidence that GM's legal and engineering staff people concealed the problem for nearly a decade, no employees have been charged. Still though, the US Attorney Preet Bharara said the investigation is still going on. Also this past week, GM announced that it will spend $575 million to settle the majority of the civil lawsuits filed over the scandal.
Under the new deal with prosecutors, an independent monitor will be appointed to oversee GM's handling of all safety problems in the future. Two charges that were drawn up against GM, the wire fraud charge, and scheming to conceal information from government regulators charge, will be dropped after three years if the automaker cooperates fully.
GM agreed to a statement of facts that described in no uncertain terms, the deceptive way and its dismissive approach to the defect.
"They let the public down," Bharara said. They just did not tell the truth in the way that they should have -- to the regulators and to this serious safety issue that risked life and limb."
The twin agreements bring to more than $5.5 billion the amount GM has spent ona problem authorities say the public -- and that that could have been handled for less than a dollar a car. Those expenses include fines, compensation for victims and the recall of millions of vehicles. With the settlements, GM takes a big step toward moving past the scandal.
Chief Executive Mary Barra appeared before several hundred employees in suburban Detroit and again apologized to the crash victims. When asked whether employees should have been charged, she deferred to comment. But she added: "We understand that lives were impacted. That is something we know, will take forward, and will have to live with every day. The settlement brought bitter criticism from safety advocates as well as family members. But they are moving in the right direction.