General Motors Co. will compensate people who were killed or injured because of faulty ignition switches on some of its vehicles– with payments to the families of those who died starting at $1-million (U.S.) – but the victims will have to give up their right to sue the company.
Details of the program were unveiled Monday by U.S. lawyer Kenneth Feinberg, a compensation expert who will decide whether claims filed by Canadians and Americans who died in crashes of GM vehicles are eligible.
“Money is a pretty poor substitute for loss,” said Mr. Feinberg, who administered funds for the victims of the 911 terrorist attacks. “It’s the limits of what we can do. We can’t bring people back.”
That comment echoes one made by Normand Dubuc of Granby, Que., whose son Dany Dubuc-Marquis died last year when his 2007 Chevrolet Cobalt compact car went off the road and the airbags failed to deploy.
“There is no amount of money that can compensate for the loss of a child,” Mr. Dubuc said earlier this year.
The death of Mr. Dubuc-Marquis is one of 13 linked to the failure of ignition switches in such GM models as the Chevrolet Cobalt and Saturn Ion compact cars.
The parents of 22-year-old Nick Baker of Cornwall, Ont., believe the crash of their son’s 2006 Saturn Ion compact car in 2012 was related to the ignition switch failure. They are involved in one of several class-action lawsuits filed against General Motors of Canada Ltd.
Russel Molot, an Ottawa lawyer who represents the Baker family, said Monday that he and his clients need to see the details of the program before deciding whether they will seek compensation.
The program applies to drivers of vehicles, passengers in those vehicles, drivers and passengers in cars hit by GM vehicles and pedestrians who were hit, Mr. Feinberg told a news conference in Washington.
The failure that led to the deaths was of a relatively simple part – an ignition switch that changed to the accessory position from the run position, which caused engines to shut down, steering systems to seize up and airbags to fail.
But investigations going back more than a decade failed to determine the cause and a GM engineer covered up the failure of the switches, a scathing study of the issue done by an outside expert found. GM fired 15 people, including the engineer after that report was released last month.
The amount of money offered in compensation will depend on the ages of those who died and their earning potential, Mr. Feinberg said.
Among the examples he offered was a 25-year-old, married with two children who was earning $75,000 a year. That person’s family would be eligible for $5.1-million.
The state of the driver will have no bearing on whether compensation is offered.
“Negligence of the driver, intoxication, speeding, texting on a cellphone, etc. is irrelevant under this program,” Mr. Feinberg said.
There is no cap on the amount of money that GM will pay out, he said, but urged those who want to punish the auto maker to use the court system. He also said he is unable to determine how much the program will eventually cost GM.
“If people want punitive damages, if they want to use litigation to go after General Motors, they should not submit a claim to me,” he said.
Letters will be sent to owners and former owners of all 2.6 million vehicles that were recalled beginning in January when GM finally determined the cause of the ignition switch failures.
Claims can be filed between Aug. 1 and Dec. 31.
Mr. Feinberg said he hopes payment of relatively simple claims can be made in three months. Those that are more complicated might take six months.
GM said the program means it is treating the victims with compassion, decency and fairness.
The company announced later on Monday six new safety recalls involving about 7.6 million vehicles going back as far as the 1997 model year. That brings the total number of recalls to 29 million vehicles.
“Our customers deserve more than we delivered in these vehicles,” GM president Mary Barra said in a statement. The company said it will take a charge of $1.2-billion in its second-quarter results, up from $700-million earlier.