Tag Archive | "General Motors"

Deaths Linked to GM Ignition-Switch Defect Rise to 29


A program to compensate victims of a faulty ignition switch in General Motors Co (GM.N) vehicles has approved two new death claims, bringing the total number of deaths linked so far to the switch to 29, according to a report released on Monday by the lawyer overseeing the program, reported Reuters.

Since it began accepting claims on Aug. 1, the program has received a total of 1,517 claims for deaths and injuries, according to the report by the office of Kenneth Feinberg, who GM has tapped to run the program. The report listed all of the claims received and approved as of Friday.

GM has faced criticism for waiting 11 years to begin recalling millions of cars with ignition-switch problems that were linked to fatalities.

The switch can slip out of position, stalling the vehicle and disabling air bags, and the defect led to the recall of 2.6 million vehicles earlier this year.

So far, 56 claims have been deemed eligible for compensation, including the 29 deaths and 27 injuries, the report showed.

Overall, the number of claims received for injuries and deaths was up almost 11 percent from 1,371 last week, according to the report. The rise is attributable in part to six new death claims, bringing the total number of death claims received by the automaker to 184, and to a continuing uptick in the number of claims for less-serious injuries – those that require hospitalization but do not cause serious permanent damage – from 1,108 to 1,240.

The program will continue to receive applications until Dec. 31 on behalf of individuals injured or killed in accidents they say were caused by the switch problem.

GM has given Feinberg, who has overseen compensation programs for high-profile catastrophes such as the 9/11 attacks and Deepwater Horizon oil spill, free rein to determine eligibility criteria and to approve or reject claims. The amount of compensation has not been capped, but GM has set aside at least $400 million to cover the costs.

Under the program’s protocol, eligible death claims can expect a payout of at least $1 million, depending on whether the deceased had any dependents or any other “extraordinary circumstances” applied.

Once claims are approved, Feinberg’s office makes cash offers to the eligible claimants. It has made 31 offers so far and 20 families have accepted the awards.

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Volkswagen Edges Out GM For No. 2 Spot in Global Sales


DETROIT, Mich. – Despite posting its strongest third quarter since 1980, General Motors appears to have given up its spot at second place in global sales to Volkswagen for the first nine months of 2014, reported Michigan Live.

GM’s global sales were up 2 percent to 7,371,743 vehicles through September, but VW said it sold 7.4 million cars during the same period, the Associated Press reports.

The AP notes that Toyota, which led all automakers after the first half of the year with nearly 5.1 million units sold, doesn’t plan to release its nine-month sales totals until later this month.

GM’s sales growth this year has been driven by increases in the U.S. and China, its two larges markets. In the third quarter, GM’s sales were up 8 percent in the U.S. and rose 14 percent in China.

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GM Sued for $10 Billion Over Losses on Recalled Cars


General Motors was hit with its biggest lawsuit so far over serial recalls, brought on behalf of drivers of 27 million vehicles who are seeking more than $10 billion in compensation for fallen car prices, reported Detroit Free Press.

The class action against GM aims to represent everyone who bought or leased a recalled car from July 2009 to July 2014 and still owns it, or sold it after mid-February when the recalls started, or had an accident that destroyed it after that date.

The automaker spurred the price drops by hiding at least 60 serious defects in around 27 million vehicles sold in the U.S., according to the complaint filed yesterday in federal court in Manhattan against “New GM,” as the carmaker became known after its 2009 bankruptcy and government bailout.

“New GM repeatedly proclaimed that it was a company committed to innovation, safety and maintaining a strong brand,” according to the filing. “The value of all GM-branded vehicles has diminished as a result of the widespread publication of those defects and New GM’s corporate culture of ignoring and concealing safety defects.”

Hundreds of individual car-price complaints against GM were combined in two separate class actions, according to a Web post by Steve Berman of Hagens Berman Sobol Shapiro LLP, one of the lawyers leading the fight against the automaker.

The larger suit concerns cars made after the bankruptcy.

A smaller one, focused on ignition-switch faults in cars made before the bailout, may be curtailed by a bankruptcy judge’s ruling next year on whether older claims for accidents and economic losses are allowed. GM asked the judge to rule that his earlier orders, which enabled the U.S. to rescue the stumbling company, bar most of the claims over old cars.

According to the suits, 2010 and 2011 Chevy Camaros lost $2,000 in value as a result of recalls. The price drop of the 2009 Pontiac Solstice is $2,900.

GM spokesman Pat Morrissey didn’t respond to an e-mail seeking comment on the suits.

The number of fatalities tied to the ignition-switch defect has more than doubled from initial company estimates, based on the latest data from the automaker’s compensation program that aims to settle, rather than fight lawsuits.

The victims’ fund, run by lawyer Kenneth Feinberg, said this week that it approved 27 payouts as of Oct. 10 for cases of death. At least 151 other fatality claims are under review.

GM, the largest U.S. automaker, said in July that it was setting aside $400 million to $600 million to pay victims. Feinberg received 1,371 claims in total, 1,193 for non-fatal injuries. Twenty-five of those injury claims so far have been ruled valid.

An investigator paid by GM said this year that for at least a decade the company failed to promptly resolve complaints from consumers, dealers and others about abnormal crashes in the Chevy Cobalt and Saturn Ion, and later it replaced the faulty ignition switch without alerting the public or changing the part number as required.

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N.Y. Judge Rules in Favor of Dealer in Case Against GM


YONKERS, N.Y. — An administrative judge from New York’s Department of Motor Vehicles said Wednesday that General Motors’ (GM) statewide sales benchmark is unreasonable, ruling that the automaker cannot enforce a post-bankruptcy agreement with one of its dealers, Beck Chevrolet Co. Inc.

Administrative Law Judge Walter Zulkoski found that the manufacturer’s sales benchmark was unfairly applied to the Yonkers Chevrolet store when it attempted to terminate the dealer’s franchise agreement in 2013. In his ruling, Zulkoski cited New York’s Franchised Motor Vehicle Dealer Act, which states that manufacturers may not “use an unreasonable, arbitrary or unfair sales or other performance standard in determining a franchised motor vehicle dealer’s compliance with a franchise agreement.”

GM uses a measure of sales performance called the Retail Sales Index (RSI), a percentage determined by the actual sales of a dealer over the dealer’s expected sales. According to the ruling, “An RSI of 100 indicates the dealer is selling the number of vehicles the franchisor expects can be sold in the dealer’s Area of Geographic Sales and Service Advantage …”

As part of a participation agreement with GM, Beck Chevrolet agreed to achieve an RSI of 70 in 2010, 85 in 2011 and 100 in 2012. The dealership was unable to reach those benchmarks, but neither did several other dealerships — and those dealerships did not face termination.

“In 2013, Beck’s RSI was 105th out of 127 for New York State … Thus in 2013, 22 dealers in New York were below Beck’s RSI but not one of those in the nine downstate counties was facing the termination process that Beck is now challenging,” the ruling read, in part.

The reason so many downstate dealerships failed to meet GM’s standards, Zulkoski noted, is because GM uses a statewide average to determine RSI. Beck Chevrolet argued that using a New York City metropolitan average would be more realistic.

“Other jurisdictions have agreed with Beck that dealers in large metro areas should not be held to a statewide average,” Zulkoski said in his ruling.

Because GM did not attempt to terminate other dealers in the New York City metropolitan area that did not meet the statewide RSI standard, Zulkoski determined that the standard was not reasonably applied. He also noted that the manufacturer does not base its decisions to terminate solely on the basis of RSI, but noted that GM did not give another reason for terminating the dealership’s franchise agreement.

Under Beck Chevrolet’s participation agreement with GM, the dealership was also required to make image improvements. But Zulkoski ruled that GM “… does not like Beck’s facility’s physical appearance … it has not shown photos of what other Chevrolet dealers’ facilities look like to support its claim that Beck’s facility is below its standards by a preponderance of the evidence.”

Beck Chevrolet’s Vice President and Dealer Principal Russell Geller, who testified for both sides, also admitted that he knew of GM’s plans to put another dealer at the Beck Chevrolet location once the dealership was terminated.

“For the New York City metropolitan area, the RSI standard of GM is unreasonable as it does not realistically reflect the Chevrolet sales challenges that Beck and other New York metropolitan dealers face, and GM is not applying the RSI uniformly to all dealers in New York and thus GM lacks due cause to terminate Beck’s franchise,” Zulkoski concluded in his ruling.

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GM Recalls Nearly 7,600 Chevy Caprices Over Transmission Issue


General Motors Co. will recall about 7,600 Chevrolet Caprice police vehicles for a transmission issue, making this the 75th safety recall action the auto maker has taken this year and putting the number of total vehicles recalled by the company in North America at well over 30 million, reported The Wall Street Journal.

The recall, posted by the National Highway Traffic Safety Administration on Tuesday, covers certain 2011 through 2013 model year Caprices. The vehicles are police patrol cruisers equipped with a specific transmission selector lever that contains two pins that can become displaced.

If the pins get displaced, the driver may be able to shift the vehicle from “park” without depressing the brake pedal or remove the ignition key without the transmission being in “park.” The situation may lead to vehicles rolling away.

This is the second time in three days the auto maker has recalled certain Caprice models. The company had recalled some versions of the 2011 and 2013 model years for an ignition switch issue. A bumping of the ignition key could cause the switch to move from “on” to “accessory,” thereby disabling the air bags.

This also marks the seventh recall issued by the company since Thursday.

The company has now recalled approximately 30,011,650 vehicles in North America this year after pledging to take quicker action to spot and react to problems in the wake of its failure to recall 2.6 million cars with an ignition switch problem for about 11 years.

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GM Compensation Fund Approves 24 Death Claims Related to Ignition Switch Recall


DETROIT, Mich. – The number of approved death compensation claims related to a recall of a faulty General Motors ignition switch now stands at 24, up from 19 last month, reported Michigan Live.

The claims were approved by a fund set up by GM to compensate victims of a defective part in mid-to-late-2000s model cars that has led to a massive recall and a federal investigation.

The victim compensation fund is being overseen by Kenneth Feinberg, a prominent Washington, D.C. attorney who oversaw similar compensation facilities for disasters such as the BP Gulf of Mexico oil spill and the Sept. 11 terrorist attacks.

The latest tally of claims received stands at 1,130, including 165 death claims, 79 “Category One” injury claims, or those resulting in quadriplegia, paraplegia, double amputation, permanent brain damage or pervasive burns, and 886 “Category Two” injury claims, or injuries that required a hospital visit within 48 hours of an accident.

To date, there have been 40 claims determined eligible, including the 24 death claims, as well as four Category One injury claims and 12 Category Two claims.

The deadline for filing a compensation claim is Dec. 31. GM has estimated that compensating all victims of the defective car part could cost the Detroit automaker anywhere from $400-600 million.

GM has recalled 2.6 million vehicles, including 2.2 million in the U.S., affected by the ignition switch. The recall includes 2003-2007 Saturn Ions, 2007-2010 Saturn Skys, 2005-2011 Chevrolet HHRs, 2006-2010 Pontiac Solstices, and 2005-10 Chevrolet Cobalt and Pontiac G5 models.

The faulty ignition switches at the heart of the unprecedented recall can move out of the “run” position to the “accessory” or “off” positions, leading to a loss of power. The risk may be increased if the key ring is carrying added weight or if the vehicle goes off road or experiences some jarring event, including rough roads. If the key turns to one of those positions, officials say the front air bags may not work if there’s a crash.

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