GM Announces Victim Compensation Fund and Another Huge Recall

GM Announces Victim Compensation Fund and Another Huge Recall Photo (cc) by IrisDragon

Monday was another huge news day for General Motors, which can’t seem to stay out of the headlines.

GM revealed the details of a massive compensation fund for victims of its faulty ignition switch. It also said it’s recalling an additional 8.2 million vehicles due to ignition defects — bringing the total of GM vehicles recalled this year for a variety of problems to more than 28 million.

At least 13 deaths and 54 crashes have been linked to faulty ignition switches in small, later-model GM cars. Now crash victims and their families can receive compensation from GM ranging from $20,000 to millions of dollars.

According to USA Today, top compensation expert Kenneth Feinberg, who was hired by GM to administer the compensation program, said there is no cap on payments to victims, nor is there a limit on the total compensation fund.

“Money is a poor substitute for loss … it’s the best we can do,” Feinberg said.

The defective ignition switch, which led to a recall of 2.6 million vehicles, caused some GM vehicles to lose power and, subsequently, the use of their air bags, power steering and power brakes.

Feinberg said claimants are eligible if they can prove that their vehicle’s air bag didn’t deploy, The Wall Street Journal said. “If an air bag deployed, you’re out,” Feinberg said.

The WSJ said GM’s compensation program is voluntary, but there is a catch:

Those who accept [the payout] must waive their right to sue the company. Those who choose not to participate could still bring court cases.

Feinberg said the settlement amounts will be based on a number of factors, The Washington Post said.

For those who were killed or suffered catastrophic injuries such as paralysis, severe burns or amputations because of the defect, the size of the settlement would be based on their age, earning potential, medical expenses and family obligations. For a 10-year-old paraplegic injured in a crash caused by the defect, the fund is offering $7.8 million.

Feinberg, not GM, has the final say on who is eligible and how much money they receive, the Post said. Claims can be submitted from Aug. 1 to Dec. 31. For more information on GM’s compensation program, click here.

Meanwhile, the automaker announced Monday that it is recalling 8.4 million vehicles – 8.2 million of which have ignition defects that can cause inadvertent key rotation. The recall includes “models of the Cadillac CTS and SRX, and the Chevrolet Malibu, Monte Carlo and Impala, as well as the Oldsmobile Intrigue and Alero, and Pontiac Grand Am and Grand Prix,” The New York Times said. The car model years range from 1997 to 2014.

Last week, GM announced that it’s recalling a half million vehicles that can unexpectedly switch into neutral, according to the Times. The recalled models include the 2014-15 GMC Sierra and Chevrolet Silverado pickups, and the new 2015 Chevrolet Tahoe, Suburban, GMC Yukon and Yukon XL sport utility vehicles.

What do you think of GM’s compensation plan for crash victims and its most recent recall? Share your thoughts below or on our Facebook page.

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