Automotive News: Why New GM Is Fighting 'Old' GM Over $1 Billion Claim For Deadly Ignition Switches
Why New GM Is Fighting 'Old' GM Over $1 Billion Claim For Deadly Ignition Switches
Here’s a story that sounds very 2017 for you: General Motors is set to fight General Motors in court. To the untrained eye, that may seem strange, but the scenario is a byproduct of the automaker’s bankruptcy nearly a decade ago, and GM’s deadly ignition switch scandal that later followed, leaving almost 125 people dead. Here’s why GM is looking in the mirror.
As part of the automaker’s bankruptcy, the “Old GM” General Unsecured Creditors Trust was created to handle claims filed against GM as part of its restructuring. The trust is what’s known as the so-called Old GM.
Attorneys representing ignition switch plaintiffs said late last week that New GM—that is, the spring chicken that came to life thanks to the U.S. government bailing it out—is on the hook for $1 billion to settle additional claims from deadly ignition switches.
In case you need a refresher, GM recalled about 2.6 million vehicles in 2014 over faulty ignition switches that could slip out of the run position, cut the engine and electrical power, and potentially prevent airbags from deploying. GM knew about the problem for more than a decade, reacted slow to address the issue, and, in the end, a total of 124 deaths have been linked to the switches. read more »
