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GM recall: Families offered R10-million

2014-07-01 09:37

MAJOR CHALLENGE AT THE HELM: General Motors' new CEO, Mary Barra, is dealing with major investigations into the automaker's delayed recall of 1.6-million vehicles. Image: AFP

DETROIT, Michigan - General Motors said on June 30 2014 it would pay the equivalent of R10-million in compensation to the families of victims killed in crashes caused by defective ignition switches in its cars.

GM has publicly acknowledged 13 deaths linked to the ignition switch defect but federal safety officials suggest the toll could be higher. The top US automaker is under investigation for failing to recall the problem cars for more than a decade, even after some in the company were aware of the defect.

GM began recalling 2.6 million older model cars in February 2014.


Kenneth Feinberg, the lawyer GM appointed to head the compensation fund, announced on June 30 2014 that claims will be taken from August 1 to December 31 2014.

Feinberg said: "There is no ceiling on the aggregate dollars."

For each eligible death claim, in addition to the equivalent of R10-million for the victim, an equivalent of R3-million will be awarded for the surviving spouse and another R3-million for each of the victim's surviving dependents.

Financial and medical treatment compensation will also be offered for those with eligible physical injury claims from an accident.

People who were killed or injured prior to GM's government-backed bankruptcy re-organisation can file claims with the "new" GM.

Feinberg said: "For accidents, the GM bankruptcy is no bar to filing a claim on this program."


GM is reportedly facing a federal criminal probe and is under congressional investigation for not having recalled the cars years ago. The automaker says it is aware of 13 deaths and 54 crashes in which air bags did not deploy, possibly due to the ignition problem.

The US auto safety regulator, the National Highway Traffic Safety Administration, said it thinks the death toll could be higher.

Independent Center for Auto Safety says it has counted more than 300 deaths linked to air bag non-deployment in the GM cars covered by the ignition recall, though it has not linked that problem to ignition shutdowns.

Since the first recall in February 2014, GM has scoured its safety files and initiated recalls of more than 20 million cars, in an effort to ward off fresh scandals and begin rebuilding the company's battered reputation.

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