GM Begins Ignition Lawsuit Talks, US Bankruptcy Court Press For Settlement

Cameron Aubernon
by Cameron Aubernon
gm begins ignition lawsuit talks us bankruptcy court press for settlement

Automotive News reports General Motors’ attorney Kenneth Feinberg met with Texas attorney Robert Hilliard at the former’s office within the Beltway to begin preliminary discussions over the claims of the latter’s 300-plus clients affected by the ignition switch recall. During the talk, no agreements were reached regarding compensation, while Hilliard viewing the first meeting as GM’s way of convincing him that it would do “the right thing” by his clients. Feinberg states he is gathering proposals for a compensation program similar to the one he orchestrated for 9/11 victims and victims of other major disasters, and should have a package ready within the next few weeks at the latest.

Meanwhile, U.S. Bankruptcy Judge Robert Gerber urged GM to settle with plaintiffs seeking compensation from the recall, proclaiming:

Frankly, it would be great if whatever money is available for injured people could go to them, and not to litigation costs and attorneys’ fees.

The viewpoint held by Gerber comes from his partial reading of 3,500 pages related to claims filed in the 10 days prior to his pronouncement. Currently, 59 lawsuits with a price tag of $10 billion in damages have been levied against the automaker, with one group refraining from suing at the automaker’s request until the judge validates their complaints sometime before the end of July. In the meantime, a separate hearing May 29 will devise a strategy to centralize the suits before GM; Gerber said he would stay out of the way for the hearing.

In other news, GM is holding back on huge dealer orders for its large SUVs and pickups due to over two dozen supply constraints regarding V8 engines, four-wheel drive systems and other components, affecting availability for the 2014 Chevrolet Silverado and 2015 Suburban and Tahoe. The constraints are frustrating for dealers in light of the popularity of the vehicles, with the automaker urging creativity to get around the supply issues, which could take as long as four weeks to resolve. Despite this, transaction prices of GM’s newly redesigned offerings netted $700 million in pretax profit for Q1 2014, while the Silverado/Sierra twins delivered a 37.7 percent haul of overall sales of all pickups sold for $40,000 and above in the same period.

Finally, CEO Mary Barra delivered the commencement speech at the University of Michigan over the weekend, as well as received an honorary degree in engineering. The university’s decision to invite Barra came under fire from two student groups, citing the recall crisis and the alleged dismissals of injured employees at a GM plant in Columbia as not representative of the university’s values behind their reasoning. As for Barra, though she did not directly bring up the recall in her speech — opting to speak about the future and all it will offer — she did offer these words of wisdom for the Class of 2014:

Remember that hope is not a strategy. Problems don’t go away when you ignore them — they tend to get bigger.

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3 of 5 comments
  • RogerB34 RogerB34 on May 05, 2014

    Obama has proposed a $300M grant to bankrupt Detroit, why not a grant to ignition lawsuit plaintiffs?

    • Highdesertcat Highdesertcat on May 05, 2014

      Why should the American taxpayers bail out these two entities? Neither Detroit nor GM is worth salvaging. They got themselves into this mess. How about all those other bankrupt cities and states in the US, like California? The residents of those locales got exactly what they deserved, because they voted for it. Ditto with Detroit. GM wasn't worth salvaging in 2009 and it certainly isn't worth bailing out with an ignition lawsuit grant in 2014. If people are stupid enough to buy GM products, they deserve exactly what they get.

  • SCE to AUX SCE to AUX on May 06, 2014

    A hasty settlement is in GM's interest, since nobody actually knows what happened yet. What about Delphi's role in this mess? If they settle soon, there will be a chorus of complaints crying 'coverup' and 'conspiracy', and they might be right. On the other hand, if GM's actions turn out to be completely defendable, what's the point of an expensive settlement? I'd rather see the truth come out - if that's possible - than see the truth silenced with quick money.

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