GM says death toll could rise; Feinberg will set compensation terms

Kenneth Feinberg: Has already drafted some "preliminary compensation ideas" that he will present over the next few weeks.

Photo credit: BLOOMBERG
PRIMER
Related Links
Related Stories
Related Topics

DETROIT -- General Motors acknowledged today that the number of deaths related to its faulty ignition switch could rise from 13, and said outside attorney Kenneth Feinberg will determine who is eligible for compensation and how much money GM ultimately will pay.

The remarks by GM executives today -- given to reporters following CEO Mary Barra's global video address to employees detailing the findings of GM's investigation into what went wrong -- seem to give Feinberg full control in determining how big GM's ultimate exposure could be.

"We want everyone who has either lost a loved one or suffered serious injury to be part of the compensation program," Barra told reporters, clarifying that the program is voluntary.

Plaintiffs can forgo Feinberg's compensation plan and pursue litigation, but GM is shielded from liability stemming from accidents that happened before its July 2009 bankruptcy.

GM President Dan Ammann said during the news conference that Feinberg "will be the independent administrator of this program."

Based on the information GM has today, Ammann said, GM links 13 deaths to the ignition switch, which was used mostly in Chevrolet Cobalts and Saturn Ions. The switch is prone to slipping out of the "run" position, disabling power steering, brakes and airbags.

GM has said that it included only front-impact crashes in which airbags did not deploy in its count of fatalities and injuries. Several trial lawyers have argued that the number of fatalities should be higher because victims of side-impact crashes in which the vehicle lost control after the switch slipped out of run, for example, should also count.

Executives declined to answer several times whether the criteria for determining eligibility would change under Feinberg's guidelines, which he still is developing.

"Feinberg will design the protocol and rules of this program," Ammann said. He said Feinberg would evaluate each claim independently, and that he didn't want to speculate about whether the number could increase.

A spokesman later clarified that GM "is not saying that the number of eligible parties will be limited to 13," but that Feinberg will determine the final numbers. The spokesman said GM will make those numbers public once Feinberg has completed his review.

Asked whether Feinberg will determine ultimately how much money GM will spend compensating victims, Ammann answered, "That's correct."

Feinberg issued a statement following GM's press conference saying that he will "be spending the next few weeks seeking advice and input from all interested parties" on the parameters of a compensation plan. He said he has already drafted some "preliminary compensation ideas" that he will present over the next few weeks to lawyers, safety groups and GM.

Barra announced Feinberg's hiring before a congressional committee on April 1, saying he would study the issue of compensation. Before today, GM executives had not formally committed to compensating victims of pre-bankruptcy accidents.

You can reach Mike Colias at mcolias@crain.com.

Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

Or submit an online comment below. (Terms and Conditions)


Newsletters & Alerts
Latest Headlines