Prosecutors settle with GM over ignition defect
Posted on Thursday, September 17th, 2015
The criminal investigation into General Motor’s handling of faulty ignition switches was settled today, after federal prosecutors accused GM of not disclosing a serious safety defect in some of its ignition switches that has been associated with at least 124 deaths.
Though some executives with GM expected that the penalty would exceed the record $1.2 billion penalty paid by Toyota for its own concealment of a serious defect, federal prosecutors will only be imposing a $900 million dollar penalty on General Motors. As part of the deal, GM also had to admit that it failed to disclose important information about a potentially deadly defect with ignitions in certain vehicles. It is still unclear as to whether prosecutors will be pressing any charges against individual employees with GM.
As long as GM complies with the terms announced today for the next three years, the company will have the two criminal charges against them dismissed. Those criminal charges include charges of wire fraud and “scheming to conceal material facts from a government regulator.”