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GM Settles With Government Over Switch Defect Cover Up


Gorehamj
  • John Goreham
    Contributing Writer, GM-Trucks.com
    9/16/2015
    General Motors has cleared one of the major hurdles it faces with regard to the cover up of unsafe ignition switches. A settlement reached with the Justice Department has three main highlights. First, GM has admitted to failing to disclose a defect that could lead to deaths. Furthermore, the company admitted that it mislead consumers about the safety defect.

Second, Nobody at General Motors will be charged with a crime. Like the similar Toyota settlement, the charges will be deferred. GM simply has to not do this type of thing again, and nobody will be held responsible. According to AP, the crimes its employees could have been charged with are "... wire fraud and scheming to conceal material facts from a government regulator."

Last, GM will pay $900 million to the U.S. government in a penalty about 30% lower than that which Toyota paid. The penalty represents less than 2% of the tax payment deferrals the company was allowed to keep as part of its 2009 bankruptcy and less than a tenth of the direct cost of the bailout paid for by the U.S. taxpayers.


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