Manufacturing Minute: What The Ignition Defect Settlements Mean For GM

General Motors last week agreed to pay more than $1.4 billion dollars to address the long-running controversy over defective ignition switches.

General Motors last week agreed to pay more than $1.4 billion dollars to address the long-running controversy over defective ignition switches. The price tag include settlements of both criminal charges and civil lawsuits.

More than a hundred deaths are blamed on the faulty switches, which could slide into the “off” position and disable critical safety features. The company issued a recall in 2014, but documents showed that GM knew about the problem for more than a decade beforehand.

The $575 million dollar civil settlement will address more than thirteen hundred victims’ lawsuits, as well as a class-action suit filed by GM shareholders.

Federal prosecutors, meanwhile, ordered a $900 million dollar fine and the hiring of an independent monitor to oversee the recall, but deferred prosecution of the company on wire fraud charges.

As expected, the charges did not implicate any GM executives, since current law makes prosecuting individual auto company officials difficult.

WHAT DO YOU THINK? 

Should the feds have tried to hit GM harder? Are the fines enough to account for more than 10 years of alleged indifference?

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