By on July 10, 2014

Recalled GM ignition switch

Kenneth Feinberg’s victim compensation plan for those severely affected by the ignition switch linked to 13 fatalities, 54 accidents and a recall of 2.6 million vehicles will not be funded by liability insurance, according to General Motors director of financial communications David Roman.

Automotive News reports the no-cap fund will be paid “through cash on hand,” which could amount to at least as much as $1 million per claim. Nir Kossovsky, CEO of Pitsburgh, Penn.-based Steel City Re, states that although this strategy will prove expensive, “it beats the alternative” of litigation as far as restoring reputation is concerned.

However, litigation will be the rule of the day for the automaker. One of the attorneys involved, Jere Beasley of Beasley, Allen, Crow, Methvin, Portis & Miles PC in Montgomery, Ala. says he has been contacted by 300 people alone in June wanting to pursue a lawsuit. He adds that while the compensation plan is mostly sound, Beasley takes issue with Feinberg’s sole authority over how claims will be handled, as well as the heavy burden of proof placed upon the claimants.

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20 Comments on “Feinberg Plan To Be Funded Out-Of-Pocket By GM...”

  • avatar

    Here is a run down of the crashes.

    Marie Sachse 81 Mo, Car was in accessory No belt in use confirmed.

    Amber Rose 16 Md Car was in accessory, Unbelted confirmed speed 69 MPH in 25 zone Blood Alcohol was .17

    Amy Rademaker 15 Wi Car was in accessory Unbelted confirmed. No one in the car had a belt. Speed 71 MPH
    Back seat passenger was also killed due to no belt.

    Amy Breen 42 Oh Car was in accessory. Belt Unconfirmed. She was seen slumped over the wheel in a suspected epileptic seizure. The car was estimated at leaving the road at up to 75 MPH.

    Zach Schoenbauch 19 and Joe Harding 19 Mi. Car in accessory Driver belted passenger not belted. Drivers Blood Alcohol was .12. Speed was reported to be between 65-93 MPH and the car was reported airborne in one story.

    Grace Elliot 13 Ester Matthews 73 PA. Car in accessory. They were both hit head on by a drunk driver who went left of center. Both wore no belts.

    Dan Marquis 23 Quebec Car in accessory and not much more information given Belt unconfirmed.

    Haysaya Chansuthus 25 Tn Car in accessory She did wear a belt and the belt failed Her blood alcohol was .19

    Gene Erickdon 25 Passenger. Car in accessory. Passenger unbelted and the driver was under the influence of drugs with enough evidence to convict and settled with a plea.

    Shara Towne 37 CA car in accessory She was wearing a belt.

    All info here was found in more than one story by the Detroit News and New York Times. If you do your research you can gleam information from each story to put it together.

    Note none of these cars steering wheels locked and all were still drivable and had vacuum to the brakes before the crash.

    It is likely the cars went into accessory before or during the crash rendering the back off. It is also likely that the lack of belt use has contributed to the death and additional injuries suffered. It is very possible the death count would be half.

    Speed, drugs and alcohol were a direct factor or secondary factor in these cases as well as an illness.

    But yet, GM has to pay out. That’s more criminal than anything GM did.

    • 0 avatar

      Car & Driver ran a story to the same effect in last month’s issue I believe. Circumstances surrounding each individual incident seem to be a very important part of this saga, but the information has done little to temper the hysteria.

      GM is in an unenviable position of choosing between looking apathetic by pointing out situational accident reports that may absolve some liability, or saving face by redeeming public trust by staying quiet and paying up.

    • 0 avatar

      Moral of the story: Get hit by a drunk driver in a defective car that GM knowingly did not recall, and GM doesn’t owe you a cent?

      You were more interesting when you were attacking Mulalley for being the best CEO Detroit has seen in a generation.

      Oh, shoot, I wasn’t supposed to feed the troll. My bad!

      • 0 avatar

        If I understand this correctly, the driver’s high BAC eliminates the automaker’s obligation to make a car that works properly.

        For GM’s sake, I do hope that there are enough drunks to keep the company in business.

        • 0 avatar

          You clearly don’t understand this correctly…because the cars do work properly as evidenced by the millions that are still on the road.

          But I like how you are removing the personal responsibility of these idiots that exceeded the speed limit, drove while under the influence, and didn’t wear a seatbelt and somehow placing fault with GM.

          And VoGo, why don’t you want to hear the truth? Does it bother you?

          • 0 avatar

            Have another beer or six. GM needs you.

          • 0 avatar

            Safety systems are supposed to help when things go wrong. Seatbelts that only work if the car is perfectly driven? No, you’d see through that. Airbags that don’t save you if the crash is your fault? That you’re OK with. If it’s GM. Pretend it was Ford, what would your reaction be then? Can you do that? are you self aware?

          • 0 avatar

            If this case involved Focuses instead of Cobalts and Ions, no doubt Z71_Silvy would argue that the government should dissolve the Ford Motor Company, put all members of the Ford Family in a prison camp, and dig up what’s left of Henry Ford I’s corpse so that we can throw rotten tomatoes at it.

          • 0 avatar

            Are these the words of a CEO whose company has done nothing wrong?

            “My name is Mary Barra, and I am the Chief Executive Officer of General Motors.
            I appreciate the opportunity to be here today.
            More than a decade ago, GM embarked on a small car program. Sitting here today, I cannot tell you why it took years for a safety defect to be announced in that program, but I can tell you that we will find out.
            … my sincere apologies to everyone who has been affected by this recall…especially to the families and friends of those who lost their lives or were injured. I am deeply sorry.”

          • 0 avatar

            “Safety systems are supposed to help when things go wrong.”

            This truism applies only to nice people who go to church on Sundays and get enough fiber in their diets.

            The rest of you heathens can crash and burn, literally.

          • 0 avatar

            Oh come on VoGo, don’t be so naive.

            GM can’t come out and appear callous and non-caring. They have to assume responsibility no matter how wrong it is.

            Had GM come out and told the truth….that the vast majority of these people died because they drove while not wearing their seatbelt or while under the influence, the would be annihilated even further by biased blogs such as this one.

            But to say that these 13 people died because the airbags didn’t pop is intellectually dishonest when the evidence points to other, far more critical factors.

            GM is the biggest victim here. I’m not saying they were without fault, but to blame them for the deaths of 13 people is a very strong accusation that is, in the end, unwarranted.

  • avatar

    We can point at the drivers as being the culprit here but the point still stands that GM did not handle the problem and recall process as it should have. That doesn’t mean GM is at fault and it does not mean the drivers are victims BUT.. the facts will hopefully speak for themselves and those that were not impaired or
    having a seizure will be justly compensated. Bets are off when they are doing 60 plus in a 25 mph zone or (if true) BAC was near .20.

    • 0 avatar

      It’s going to be very hard to prove that because the ignition switch wasn’t built to the standard of some lawmakers in Washington or some angry bloke who comments on TTAC, these people died.

      I mean, I could take 3 million Explorers or F-Series trucks and probably find FAR MORE than 13 deaths. Should they be recalled for frivolous reasons too?

      People die in car crashes. That’s an accepted risk of driving an automobile.

      • 0 avatar

        It is a known engineering issue that GM covered up, at minimum GM should be charged for that. You seem to skip over that fact.

      • 0 avatar

        The problem starts with the fact that the failure of safety equipment to function properly probably contributed to their deaths. This failure to operate properly is rooted in a defective part that GM ignored for too long.

        You keep skipping those crucial parts.

        • 0 avatar

          Really? That’s where the problem starts? I think any reasonable person would agree that the “problem” started when these people CHOOSE do drive/ride without a seatbelt or while under the influence, or if tragically they suffered a medical condition while driving.

          Again, the ignition switch is a very small factor. The lack of seatbelt use coupled with speed/drugs/alcohol/medical condition played a far bigger role in these people’s fate.

          • 0 avatar

            NO an ignition switch is a HUGE factor. Look at that switch… if you dont know a godam thing about igswitches, that one looks like its right outta 1980. Could they have made it any cheaper/punier/less ROBUST???? Apparently NOT.
            In hindsight, they shoulda let SAAB run this zombie. FUGM.

          • 0 avatar

            It just isn’t. And nobody can rationally argue otherwise.

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