General Motors admitted it failed to disclose to the public a deadly problem with small-car ignition switches as part of a $900 million deal reached with U.S. federal authorities to avoid criminal charges, authorities announced Thursday.
The automaker will retain an independent monitor to review and assess its policies to ensure compliance with the agreement with the government, according to court papers released by U.S. Attorney Preet Bharara in Manhattan.
The deal does not have any application in Canada, though there are Canadian deaths linked to the GM ignition switch fault.
"The agreement reached is part of the U.S. legal system, applies to GM USA, and falls outside of Canadian legal purview," a Transport Canada spokeswoman said in an email.
Besides the $900 million forfeiture and the monitor, the deal calls for two criminal charges to be dismissed if the company complies with terms of the agreement for three years. The $900 million must be paid by Sept. 24.
The two-count criminal information accuses GM of wire fraud and scheming to conceal material facts from a government regulator.
Last year, GM recalled 2.6 million older small cars worldwide to replace the faulty switches. Those included the Chevrolet Cobalt and Saturn Ion.
The faulty switches can unexpectedly slip out of the run position to off or accessory. That shuts off the engine and disables power-assisted steering, power brakes and the air bags.
The problem caused crashes that killed at least 124 people and injured 275 more, according to lawyers in charge of a fund set up by GM to compensate victims. Families of those who died will get at least $1 million. GM has set aside $625 million to compensate people who accept a settlement with the fund. GM also faces multiple lawsuits related to the problem.
I don't think this is good enough. They deliberately and knowingly engaged in behaviour that resulted in the deaths of over a hundred people. Instead of avoiding charges and paying a fine, they ought to have been charged AND pay that fine. I think that being able to buy yourself out of serious criminal and civil trouble is a practice that has gone too far in general in the West.