GM nears settlement in ignition-switch case
Defect blamed for more than 120 deaths and massive auto recalls
General Motors is close to announcing that it has reached a settlement to resolve a federal criminal investigation into its handling of a deadly ignition-- switch defect blamed for more than 120 deaths and massive recalls, according to a person with knowledge of the case.
GM would pay a penalty of less than the $1.2 billion Toyota paid in connection with its handling of an unintended acceleration case, the person said on condition of anonymity because of the sensitivity of discussing an open investigation.
The potential settlement was first reported Wednesday by The
Wall Street Journal, citing anony- mous sources. The deal, which is expected to include a wire fraud charge, could be revealed as early as this week.
The ignition switch defect caused small cars, mostly from GM’s pre-bankruptcy era, to turn off suddenly when jostled, cutting off engine power and disabling airbags.
A GM spokesman declined to comment Wednesday.
GM repeatedly has said it is cooperating with investigators.
GM created and funded an in- dependently administered fund to examine incident reports and offer settlements to victims after the issue was publicly disclosed in early 2014.
That fund, run by lawyer Ken Feinberg — who also ran the 9/11 victims compensation fund — has approved settlement offers for families of 124 victims who were killed and 275 who were injured.
The settlement between GM and the U.S. Justice Department would put an end to the criminal probe that had included an inves- tigation into whether the automaker had violated bankruptcy law by neglecting to disclose the ignition-switch defect during its Chapter 11 case in 2009.
In 2014, General Motors admitted it had allowed an ignition-switch defect to linger for more than a decade. Investigators found a phalanx of engineers, attorneys and midlevel executives had neglected to grasp the significance of the matter or failed to follow federal guidelines for reporting serious defects.