States Reach $120 Million Settlement With General Motors Over Defective Ignition Switches

The settlement concludes a multistate investigation into General Motor's failure to timely disclose known safety defects

States Reach $120 Million Settlement With General Motors Over Defective Ignition Switches
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October 23, 2017

A $120 million settlement has been reached between the General Motors Company (GM) and the attorneys general of 49 states and the District of Columbia over allegations that GM concealed safety issues related to ignition-switch-related defects in its vehicles.

The settlement concludes a multistate investigation into the auto manufacturer's failure to timely disclose known safety defects associated with unintended key- rotation-related and/or ignition-switch-related issues in several models and model years of GM vehicles.

"Safety issues in cars are bad enough" said North Carolina Attorney General Josh Stein. "But concealing those issues is unacceptable. My office will continue to hold companies accountable as we work to protect North Carolinians."

ignition-switch-related Recalls

In 2014, GM issued seven vehicle recalls in response to unintended key-rotation-related and/or ignition-switch-related issues, which have affected over 9 million vehicles in the U.S. The recalls involved a defective ignition switch which, under certain conditions, could move out of the 'Run' position to the 'Accessory' or 'Off' position. If this occurs, the driver experiences a loss of electrical systems, including power steering and power brakes. If a collision occurs while the ignition switch is in the 'Accessory' or 'Off' position, the vehicle's safety airbags may also fail to deploy, increasing the risk of serious injury or death in certain types of crashes in which the airbag was otherwise designed to deploy.

As the states alleged, certain employees of GM and General Motors Corporation knew as early as 2004 that the ignition switch posed a safety defect because it could cause airbag non-deployment. However, despite this knowledge, GM personnel decided it wasn't a safety concern and delayed making recalls. GM continued to market the reliability and safety of its motor vehicles which were equipped with this defective ignition switch.

The states alleged that these actions were unfair and deceptive and that the automaker's actions violated North Carolina's consumer protection laws.

Settlement Requirements

The settlement with the states requires GM to:

1) Not represent that a motor vehicle is "safe" unless they have complied with the Federal Motor Vehicle Safety standards applicable to the motor vehicle at issue.

2) Not represent that certified pre-owned vehicles that GM advertises are safe, have been repaired for safety issues, or have been subject to rigorous inspection, unless such vehicles are not subject to any open recalls relating to safety or have been repaired pursuant to such a recall.

3) Instruct its dealers that all applicable recall repairs must be completed before any GM motor vehicle sold in the U.S. and included in a recall is eligible for certification and, if there is a recall on any certified pre-owned vehicle sold in the U.S., the required repair must be completed before the vehicle is delivered to a customer.

GM has also agreed to pay the participating attorneys general a total of $120 million. North Carolina's share of that total is $2,692,395.49.

Participating States

The states participating in the settlement with GM are: Ohio, South Carolina, Connecticut, Florida, Maryland, Michigan, New Jersey, Pennsylvania, Texas, Alabama, Alaska, Arkansas, California, Colorado, Delaware, District of Columbia, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, Wisconsin, and Wyoming.