General Motors to Pay Millions for Recall-Related Deaths

By Melinda Carstensen

General Motors announced that it would pay $1 million for each death caused by a faulty ignition switch, an error that has contributed to a recall of about 29 million vehicles since 1997.

GM has publicly linked 13 deaths to that recall, but it looks poised to compensate for even more, the New York Times reports. 

A Reuters investigation found that at least 74 people had died, and the death toll is expected to rise. 

The defect allows the ignition switch to rotate while a person is driving, cutting off power to the vehicle and leaving the driver without steering and brakes. That prevents air bags from deploying, Reuters reported.

Under GM's compensation formula, families of victims who died will receive at least $1 million, plus a calculation of lifetime earnings lost and $300,000 for a spouse and for each dependent.

Kenneth R. Feinberg, the expert hired by the automaker, gave the Times a hypothetical example: “The family of a 25-year-old married woman with two children who was earning $46,400 a year at the time of her accident would receive $4 million,” he told the Times. Those who have suffered from life-changing injuries would receive more under the plan. A paraplegic, for example, could be compensated in the double-digit millions.

Some estimates point to upwards of 100 deaths from the ignition switch error, which has affected seven models including the 1997-2005 models of the Chevrolet Malibu and the 2003-2014 Cadillac CTS.

People can look up their vehicles at the GM Recall Center.

“We are taking responsibility for what has happened by taking steps to treat these victims and their families with compassion, decency and fairness,” Mary Barra, G.M.’s chief executive, said in a statement. “We made serious mistakes in the past and as a result we’re making significant changes in our company to ensure they never happen again.”

The compensation plan could cost GM billions, according to the Times.

Those treated for less-severe injuries are also eligible to file a claim. Depending on the duration of hospital stay, compensation values range from $20,000 to $500,000. Those treated in an outpatient unit could receive up to $20,000.

GM will use two primary criterions to gauge eligibility: First, the crash must have involved a car that was recalled for the faulty switch. Second, Feinberg noted, there must be evidence that air bags didn’t deploy. If airbags did deploy, that would indicate that power was on and the faulty switch wasn’t to blame.

Other documents such as police reports, witness statements and insurance claims will also be taken into account. Politico reports it won’t consider other factors, like drunk driving or speeding, when allocating awards.

G.M. added 8.2 million vehicles to its faulty ignition switch recall on Monday, the Associated Press reported. It also announced four other recalls that impacted an additional 200,000 automobiles.