Faulty Ignition Switches Have Cost GM Billions

Since early 2014, General Motors has faced one of the largest auto safety scandals in history over its defective ignition switches, costing the company $2.9 billion in recalls and loaner cars alone. And that’s not all: the automaker also has paid nearly $100 million to victims out of a compensation fund, which is estimated to cost GM $600 million by the time all of the claims are resolved. Moreover, GM is facing a daunting number of lawsuits, including 104 death and injury lawsuits from ignition switch-related accidents, 108 suits over depreciated car values in affected models, and at least 20 more suits in Canada as well. Finally, numerous state and federal agencies are investigating misconduct and fraud, among other serious allegations against the company and its top officials, which could result in the imposition of significant fines, penalties, and other monetary awards. According to a recent filing with the SEC, in accounting for the continuing costs of this massive safety failure, GM stated, “We cannot currently estimate the potential liability, damages or range of potential loss as a result of the legal proceedings and government investigations.”