Four months after General Motors said it had approved 124 death claims – 10 times the number the carmaker originally acknowledged – related to the massive ignition switch defect it failed to address in more than 2.59 million vehicles, lawyers for the company have calculated a final bill for paid-out claims: $594.5 million.
In all, the company provided compensation for 399 eligible claims – 124 for deaths and 275 for injuries – representing about 90% of all approved claims, the Associated Press reports.
While that might seem like a high number, GM previously disclosed that nine-out-of-10 ignition switch compensation claims submitted to the fund were declined. The fund, which ceased accepting claims after Jan. 31, ultimately rejected 3,944 of the 4,343 applications it received.
Camille Biros, deputy director for the fund, told the AP on Thursday that the claims that were rejected “couldn’t support any connection to the ignition switch” defect that affected more than two million GM vehicles, most notably the Chevy Cobalt and Saturn Ion.
The defective switch in these vehicles could be inadvertently turned off while the car was in use, resulting in a loss of power to the airbags.
“We faced the ignition switch issue with integrity, dignity and a clear determination to do the right thing both in the short and long term,” a spokesperson for the company said in a statement.
Of the claims paid out, 128 were for crashes that happened before GM emerged from bankruptcy in July of 2009, according to the fund.
Those payouts are a bit surprising, as the company wasn’t required to provide compensation. A bankruptcy judge previously ruled that the “new” company was shielded from such claims.
Some at GM knew about the defect as early as 2001, before the affected vehicles even went into production. The design flaw was quietly fixed several years later but without issuing a recall to fix vehicles on the road. Additionally, the part number was not changed, meaning there was no easy way to differentiate between the defective switches and the improved parts.
The company claims that upper management at GM did not learn of the problem until shortly before issuing a recall in 2014, a decade after people began dying in accidents related to the ignition issue. Even though documents turned up during a federal investigation showed that at least one current GM VP was made aware of the defect in 2005, the carmaker has denied any sort of cover-up and instead blames a “culture of incompetence.”
GM agreed in September to pay $900 million to the Justice Department to settle criminal charges tied to the long-delayed ignition recall.
The final compensation fund report only closes the door on a portion of GM’s issues related to the ignition switch debacle. The AP reports that the company still faces 217 wrongful death and injury lawsuits in the U.S. and Canada.
Additionally, it must still face 122 lawsuits related to reduced value of affected vehicles.
GM ignition switch fund pays out $594.5M on 399 claims [The Associated Press]
by Ashlee Kieler via Consumerist