There was a great deal of media attention paid to GM’s fine of $900 million for hiding the fatal ignition-switch defect that caused at least 124 deaths. It’s now clear that General Motors’ officers and employees will face no criminal charges. Instead, the automaker will pay the $900 million fine, which is less than a third of its $2.8 billion in profit last year. The settlement with the Department of Justice (DOJ) apparently signals a close to the criminal investigation into the massive cover-up by GM. I agree with the critics who say the automaker got off very easy for mishandling one of the worst auto safety crises in history with years of lying to safety regulators. Because of the automakers conduct thousands of people were left at risk of serious injury and even death. Clarence Ditlow, Executive Director of the Center for Auto Safety, had this to say: “I have a saying about GM: There’s no problem too big that money can’t solve. GM is buying [its] way out of a criminal prosecution.” His certainly appears to be an accurate assessment of the situation.
The DOJ agreed to hold off on prosecuting General Motors for charges of wire fraud and scheming to hide the defect from regulators, as well as drop the criminal case in three years, if the Detroit automaker continues to acknowledge responsibility, accept independent monitoring and cooperate with authorities. Critics point out the $900 million fine is a fraction of the automaker’s $156 billion in revenue last year. Also the public should be reminded of the $50 billion U.S. taxpayers gave to GM during the bailout. No executives will face jail time, even after the company acknowledged how high-level delays and deception had contributed to hundreds of roadway deaths. GM’s penalty is also less than the record-setting $1.2 billion fine levied on Toyota last year after the Japanese car giant failed to recall cars that could suddenly accelerate without warning.
Safety advocates believe the laws governing vehicle safety leave big holes that prevent automakers’ employees or executives from being held accountable for injury or death. To pursue homicide charges, prosecutors would have to prove a company representative knowingly intended to kill someone. Other federal safety laws, including those under the Occupational Safety and Health Administration, allow for criminal prosecution of executives whose “willful violation” led to deaths. In this case, “the facts are good, but the law is weak,” Ditlow said. “The law is just inadequate to the crime.” It’s evident that Congress must get involved and make the needed changes in the laws that cover this sort of thing.
GM also announced that it will pay $575 million to settle more than 1,300 pending death and injury lawsuits. Those lawsuits, which were in the MDL, include at least 50 deaths not included in the 124 deaths that GM has admitted to and were counted by Kenneth Feinberg in his handling of the GM Compensation Fund. We have said all along that the total death count was in excess of 200 and it appears that our projection was on target.
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