US’s largest car maker settles with Department of Justice and admits it failed to disclose defect in ignition switches that led to deaths of at least 124 people

General Motors has agreed to pay a $900m fine to avoid a criminal investigation into allegations that it deliberately hid information about a fault that led to the deaths of at least 124 people.



As part of the settlement with the Department of Justice on Thursday, GM admitted that it “failed to disclose to its US regulator and the public a potentially lethal safety defect” and “further affirmatively misled consumers about the safety of GM cars afflicted by the defect”.

The company paid the fine in order to avoid being criminally charged with scheming to conceal the fact that a fault with its ignition switch could lead to engines suddenly turning off and brakes being disabled.



Preet Bharara, US attorney in Manhattan, said: “For nearly two years, GM failed to disclose a deadly safety defect to the public and its regulator. By doing so, GM put its customers and the driving public at serious risk. Justice requires the filing of criminal charges, detailed admissions, a significant financial penalty and the appointment of a federal monitor. These measures are designed to make sure that this never happens again.”

America’s largest car maker eventually recalled 2.6m cars to replace the faulty ignition switch. The switch could be jammed into the “accessory” position, shutting off the engine, disabling power steering, brakes and airbags.



An investigation found that GM engineers and lawyers knew about the defect for more than a decade before the company admitted to any problem and began the recall. GM fired 15 employees following the 2014 internal investigation.

Loretta Lynch, the US attorney general, said: “Every consumer has the right to expect that car manufacturers are taking their safety seriously. The Department of Justice is committed to ensuring that the products Americans buy are safe; that consumers are protected from harm; and that auto companies follow the law.”

GM will also pay $575m to settle 1,385 civil lawsuits related the defect – which effected Chevrolet Cobalts, Saturn Ions and other GM vehicles – over the past decade. “The parties to these agreements have resolved difficult claims without the burden, expense and uncertainty of litigation,” Craig Glidden, GM executive vice-president and general counsel, said.



Bob Hilliard, lead attorney for the families of the dead and injured, said: “Lives were taken and families were devastated, and there is no way to ever change that sad fact. Still, this agreement will allow some healing, as GM recognizes, through its payment of financial compensation, the needlessness of this enormous national tragedy.”

Clarence Ditlow, executive director of the Center for Automotive Safety, a nonprofit advocacy group, said: “GM killed over a 100 people by knowingly putting a defective ignition switch into over 1 million vehicles. Today thanks to its lobbyists, GM officials walk off scot-free while its customers are six feet under.”