GM Faces $10 Billion in Lawsuits Related to Delayed Vehicle Recall
The GM ignition recall covers 2.6 million older-model cars from years 2004 and 2005.
While in US bankruptcy court, the automotive manufacturer told government officials that an additional 20 lawsuits have been filed April 30th.
Several of the personal injury lawsuits allege that the “Old GM” – the company declared a separation between “old” and “new” after it successfully filed for bankruptcy in 2009 – promoted the 2004 and 2005 model Cobalts and other vehicles under the current vehicle recall as safe and reliable, despite possessing knowledge of the dangerous key ignition problem. Many of these injury and wrongful death lawsuits allege that “New GM” has successor liability, and one lawsuit even claims “deceptive and unfair acts and omissions of old GM.”
Some of the vehicle recall lawsuits also name Delphi Corp, which manufactured the defective ignition switches, as a co-defendant in the lawsuit.
Texas and California have put a hold on the lawsuits, pending a hearing from the bankruptcy court judge.
“Similar to Toyota’s widespread ‘unintended acceleration’ recall from 2009, GM has seen short-term impacts to its resale values,” Eric Lyman, ALG vice president of editorial, said in a statement. “It’s unlikely there will be any long-term effects, however, and ALG has no reason to forecast lower values than previously projected.
“In fact, the data ALG has recorded since 1964 has proven that few ripples in the market have substantial long-term sales implications. We expect GM’s values to mimic what happened to Ford and Toyota after their mass recalls, with the affected vehicles hurting little more than GM’s reputation for several years.”
“GM has recalled more cars this year than it has sold in several years combined,” NPR’s Renee Montagne said on Morning Edition, “and it’s only May.”
The Department of Transportation also levied the highest possible fine against the automobile manufacturer – $35 million – and now seeks a motion from Congress to raise that $35 million cap to $300 million.
“They are doing damage control and reacting to the outrage over their history of concealing safety issues,” Senator Richard Blumenthal, a Democrat from Connecticut, said in an interview on Tuesday, May 20th.
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