General Motors Reaches Agreement With Federal Prosecutors

GM and federal prosecutors reach agreement over GM's deadly ignition switches.

Posted in News

— General Motors has reached an agreement with federal prosecutors over a criminal investigation concerning GM's deadly ignition switches. Although the investigation was labeled a "criminal" investigation, it looks like no GM employees or management will see any jail time. Additionally, a wire fraud charge will be dismissed if GM keeps its nose clean for three years.

The investigation was opened after GM admitted to waiting over 10 years to recall millions of cars with faulty 57-cent ignition switches. The cars could simply hit a pothole and cause the ignition switch to move from the "run" position to the "accessory" or "off" position. Other methods of moving the ignition switch are a bump to the key from a driver's knee and the jostling of a heavy key ring.

With the car shut off, all power steering, power brakes and airbags are useless.

Accidents occurred for over 10 years while people were thrown into jail for allegedly causing deaths that were later proven to have been caused by the defective switches.

While facing hundreds of lawsuits, the automaker created a "compensation fund" for those injured and the families of those killed due to the ignition switches moving out of position. What started with GM finally admitting to 13 deaths caused by the ignition switches grew into the compensation fund administrator approving 124 death claims and 274 injury claims.

GM, the automaker that went bankrupt only to receive a $49.5 billion bailout from U.S. taxpayers, came to be known as "Government Motors" and it appears the government is doing the automaker another favor.

GM Ignition Switch Agreement

General Motors is charged with concealing a deadly safety defect from the National Highway Traffic Safety Administration (NHTSA), and with misleading consumers concerning the safety of certain of GM’s cars.

GM agreed to a deferred prosecution agreement that requires the automaker to transfer $900 million to the United States no later than September 24, 2015. By doing so, GM agrees to the forfeiture of the money based on a parallel civil action filed in the Southern District of New York.

The agreement also requires that an independent monitor review and assess policies, practices and procedures relating to GM’s safety-related public statements, sharing of engineering data and recall processes.

If GM abides by all of the terms of the agreement, the government will defer prosecution on the information for three years and then seek to dismiss the charges.

Saying the entire ignition switch ordeal was completely avoidable, prosecutors say GM chose cost over safety and the decision caused hundreds of deaths and injuries.

Prosecutors say from the spring of 2012 through February 2014, the automaker deceived consumers and NHTSA concerning the connection GM's employees had identified between the defective switch and airbag failures. At the same time, GM kept telling consumers the ignition switch wasn't defective.

However, engineers at GM knew before 2002 the switch could easily move out of the "run" position, a fact ignored by the lead engineer who approved the switch.

In 2004 and 2005, even GM's own employees were reporting cars stalling because of switches moving out of position. GM considered fixing the problem but declined, even though it would have cost less than a dollar per switch. All this time GM was making public statements the switch was not a safety problem.

By 2012, the automaker knew the defective switches were causing accidents and killing people, especially in the Chevy Cobalt, yet GM kept ignoring the clear evidence.

Not until 2014 did GM finally first notify NHTSA of the connection between the switch and airbags that failed to deploy.

For all the talk about GM and its criminal conduct, safety advocates are calling the agreement a farce because GM employees and management walk away without a scratch.

"GM killed over a 100 people by knowingly putting a defective ignition switch into over 1 million vehicles.  Yet no one from GM went to jail or was even charged with criminal homicide.  This shows a weakness in the law not a weakness in the facts.  GM killed innocent consumers. GM has paid millions of dollars to its lobbyists to keep criminal penalties out of the Vehicle Safety Act since 1966.  Today thanks to its lobbyists, GM officials walk off scot free while its customers are six feet under." - The Center for Auto Safety

Auto safety advocate and attorney Ralph Nader had harsh words concerning the government agreement, calling GM a "homicidal fugitive from justice" that "desecrates the memory of over 100 victims."

"In particular, the exoneration of all GM personnel gives new meaning to the surrender of federal law enforcement that remains impervious to the preventable hundreds of thousands of deaths and injuries resulting from documented corporate criminal negligence or outright criminality throughout our country every year."

Nader further says federal prosecutors should hand in their resignations and President Obama should put in charge "corporate law and order officials to deal with an ongoing media-reported corporate crime wave washing over the country."

Prosecutors say the following vehicles were equipped with the defective ignition switches. Click a year to read complaints about that model.