Conn. Joins $120M Settlement with General Motors over Defective Ignition Switch
Connecticut has joined with 48 other states and the District of Columbia in a $120 million settlement with General Motors Company (GM) to resolve allegations that the company concealed safety issues related to ignition-switch defects in certain GM vehicles, Attorney General George Jepsen announced today.
Connecticut served on the multistate investigation's nine-state executive committee. The investigation was launched in 2014 following National Highway Transportation Safety Administration (NHTSA) recalls into the defective ignition switches.
In 2014, GM issued seven vehicle recalls in response to unintended key-rotation and ignition-switch issues, which have affected more than 9 million vehicles across the country. The recalls involved a defective ignition switch that, under certain circumstance, could move out of the "run" position into the "accessory" or "off" position, causing electrical systems, including power steering and power brakes, to become inoperable.
If a collision occurs while the ignition switch is in "accessory" or "off," the vehicle's safety airbags may also fail to deploy, increasing the risk of serious injury or death that the airbag was designed to prevent.
The state alleged that certain General Motors Corporation employees knew as early as 2004 that the ignition switch posed a safety defect because it could cause airbag non-deployment. Those employees were transferred to GM when General Motors Corporation went bankrupt in 2009. GM performed its own analysis of the ignition switch and, by its own admission, knew that the ignition switch constituted a safety defect. However, despite this knowledge, GM delayed making recalls and continued to market the reliability and safety of motor vehicles that were equipped with the defective ignition switch. The states alleged that these actions were unfair and deceptive in violation of state consumer protection laws.
"Automakers, like any manufacturer, have a responsibility under state law to be truthful in the representations they make about their products," said Attorney General Jepsen. "In this case, our investigation involved allegations of deceptive practices around the safety of their motor vehicles. Safety should always be of the highest priority, especially when it comes to a motor vehicle, where the consequences can be dire. I'm pleased that this matter has been brought to a resolution that involves new guarantees from GM when it comes to recalls and repairs involving its vehicles."
"Safety should always be the highest priority for any business," said Consumer Protection Commissioner Michelle H. Seagull. "Misrepresentations of safety standards are particularly troubling when they deal with motor vehicles because of the potential damage that can be done. I'm pleased that this matter has come to a close, that families will be protected from this defect, and that GM will have more appropriate guarantees regarding recalls and repairs of their vehicles."
Connecticut's share of the $120 million settlement is $3,206,587.58, of which $350,000 will be deposited in the Attorney General's Consumer Protection Fund and the remainder will go to the state's General Fund.
In addition to the monetary payment, GM will be required to instruct its dealers that all applicable safety repairs be completed before any GM motor vehicle sold in the United States and included in a recall is eligible for certification. If there is a recall on any certified pre-owned vehicle sold in the U.S., the required repair must be completed before the vehicle is delivered to a consumer.
The settlement also provides that GM not represent that a vehicle is "safe" unless they have complied with the Federal Motor Vehicle Safety standards to the motor vehicle at issue. GM may not represent that certified pre-owned vehicles that GM advertises are safe, have been repaired for safety issues or have been subject to any open recalls relating to safety or have been repaired pursuant to such a recall.
The settlement is not final unless and until approved by the court.
Assistant Attorneys General Brendan Flynn and Lorrie Adeyemi, head of the Consumer Protection Department, assisted the Attorney General with this matter.
Please click here to view a copy of Connecticut's settlement.
Jaclyn M. Severance