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GM to Pay $120 Million in Settlement over Defective Ignition Switches

General Motors has agreed to pay $120 million in a multistate settlement over allegations that the automaker concealed safety issues related to ignition-switch defects in its vehicles.

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General Motors has agreed to pay $120 million in a multistate settlement over allegations that the automaker concealed safety issues related to ignition-switch defects in its vehicles.

The settlement, reached between the attorneys general of 49 states and the District of Columbia, concludes a multistate investigation into GM’s failure to timely disclose known safety defects associated with unintended key-rotation-related and/or ignition-switch-related issues in several models and model years of GM vehicles.

In 2014, GM issued seven vehicle recalls involving defective ignition switches that, under certain conditions, could move out of the “Run” position to the “Accessory” or “Off” position. If this occurs, the driver experiences a loss of electrical systems, including power steering and power brakes. If a collision occurs while the ignition switch is in the “Accessory” or “Off” position, the vehicle’s safety airbags may fail to deploy.

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As the states alleged, certain employees of GM and its predecessor, General Motors Corp., knew as early as 2004 that the ignition switch posed a safety defect. Despite this knowledge, GM personnel decided it wasn’t a safety concern and delayed making recalls, the states alleged. GM continued to market the reliability and safety of its motor vehicles that were equipped with the defective ignition switch.

Under a consent judgment, GM agreed not to represent motor vehicles as “safe” unless they comply with the Federal Motor Vehicle Safety standards, instruct its dealers that all recall repairs must be completed before any GM motor vehicle sold in the U.S. is eligible for certification, and not represent that certified pre-owned vehicles are safe or have been repaired or inspected for safety issues unless the vehicles are not subject to any open recalls.

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The states alleged that these actions were unfair and deceptive and that the automaker’s actions violated state consumer protection laws.

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