GM Recall: General Motors To Recall Thousands Of Vehicles; More Lawsuits On The Way?
General Motors (GM) this week has been dealing with more ignition recall lawsuits.
GM says it needs to go to bankruptcy court to protect itself from further lawsuits, but the lawsuits seem to be stemming from as far back as 2009 or even further, and not recently. As of February this year, GM has recalled 2.6 million cars because of the ignition-switch problem.
There are two questions that need to asked: firstly, can a legal shield, that GM is trying to enact through the New York legal system, protect them from current lawsuits stemming from the ignition recall; and secondly, how much did GM perhaps know about the faulty ignition?
In 2014: GM intends to file a motion with a federal bankruptcy judge in New York, seeking a court order to stop plaintiffs from suing the company over the ignition. There are 36 ignition switch lawsuits, and it is expected to cost GM $1.3 Billion.
In 2009: GM filed for bankruptcy and as an end result they gained a legal shield as part of their bankruptcy clause. During that time, GM was facing about 2,500 lawsuits of various kinds. In most cases, plaintiffs had received only pennies on the dollar, CNN Money reported. And, after filing for bankruptcy during that time, GM become a new corporation.
The recall, initiated in February, involves vehicles from as long ago as 2005. If GM pays people with claims from prior to 2009, it could open itself up to thousands of unrelated lawsuits.
2006: Forbes reported that information was discovered in a memo and a fax cover sheet, dated May 27th, 2006, which was made public on Friday. The memo explains information that supported GM's part change and also includes GM's approval to proceed with the change, according to the House Oversight and Investigations Subcommittee.
2005-2004: TIME reported that GM had detected similar problems as early as 2004. "GM's CEO Mary Barra, who became the company's first female CEO in January of 2014, testified in front of congressional committees this month about the mishandled recall," TIME reported. "She has also met with, and apologized to, some of the families of the drivers who died as a result of the flaw."
Since GM's 2014 recall nightmare, Barra announced at the New York City auto-show that they have a new "global product integrity" unit to prevent future problems. The details of the unit or how it would operate have not been outlined to the public. The massive recall is perhaps linked to 13 alleged deaths, TIME reported.
If GM had chosen to replace ignitions when it detected the problem, the cost would have been $37.7 million, according to documents released by the House committee. The cheaper repair that GM authorized cost the company $14.2 million, Forbes reported.
"We know the world is watching," Barra said at the annual car show, "And we know we'll be judged by our actions."
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