Summary The largest US automaker agreed to a deferred prosecution agreement to settle the probe
NEW YORK (AFP) - General Motors will pay $900 million to settle a criminal probe on its failure to recall cars with faulty ignitions linked to at least 124 deaths, US officials announced Thursday.
The largest US automaker agreed to a deferred prosecution agreement to settle the probe into why GM took no action to recall millions of cars despite knowing about the defect for more than a decade.
The government charged GM with wire fraud, in addition to concealing the defect to regulators at the National Highway Traffic Safety Administration. The government agreed not to seek a conviction in exchange for the fine and the appointment of an independent monitor at the company.
No individuals were charged Thursday.
"General Motors not only failed to disclose this deadly defect, but as the Department of Justice investigation shows, it actively concealed the truth from NHTSA and the public," said Transportation Secretary Anthony Foxx.
"Today s announcement sends a message to manufacturers: Deception and delay are unacceptable, and the price for engaging in such behavior is high."
"The mistakes that led to the ignition switch recall should never have happened. We have apologized and we do so again today," said GM chief executive Mary Barra, who was tapped to lead the company in December 2013 shortly before the ignition-switch problems mushroomed into a massive scandal.
"We have faced our issues with a clear determination to do the right thing both for the short term and the long term," Barra said.
GM began recalling some 2.6 million cars worldwide in February 2014 after years of avoiding acknowledgement of the dangerous problem.
The defective switches can cause the ignition to unintentionally switch out of the "on" position, disabling airbags and other functions while the car continues to run.
GM personnel knew by 2005 that the ignition switch was prone to shutting accidentally, even when a car hit a few small bumps, and by 2012 knew that the defect not only impaired the car s power steering and power brakes, but also the airbag, causing several fatal incidents and serious injuries, the US said.
But GM continued to sell the cars and offered assurances on safety. When GM understood that the defect was "undeniably" a safety problem around the spring of 2012, it did not recall the vehicles, the Justice Department said.
The defect has been linked to 124 confirmed fatalities and about 275 serious injuries, according to data from administrators of a GM fund to pay ignition claims.
- Settlement criticized -
News of the settlement drew a stern statement from US Democratic senators Richard Blumenthal, of Connecticut, and Edward Markey, of Massachusetts, who said the US should have sought a larger monetary penalty and a criminal acknowledgement from GM.
"GM knowingly concealed information that could have prevented these deaths, and it is shameful that they will not be held fully accountable for their wrongdoings," they said.
The penalty amounted to less than the $1.2 billion Toyota paid in 2014 to settle US criminal charges it lied to safety regulators and the public as it tried to cover up deadly accelerator defects.
The Justice Department praised GM for taking "exemplary actions to demonstrate acceptance and acknowledgement of responsibility for its conduct," including providing timely and meaningful cooperation with investigators, ousting wrongdoers and establishing an independent victims compensation program.
GM also said Thursday that it had agreed to settle some civil actions related to the ignition-switch scandal.
It settled a shareholder class-action suit filed in a Michigan federal court, and reached an agreement that potentially covers about 1,380 individual death and injury claimants, about 60 percent of personal injury claimants whose cases are pending in a US court in New York, a GM spokesman said.
GM said it would take a $575 million charge in the third quarter for the civil suits, on top of a $900 million charge for the US penalty.
GM shares were up 0.6 percent at $31.39 in early-afternoon trade.
