GM victim-compensation plan to be released Monday
Feinberg: Not expected to attach a dollar amount to the plan.
DETROIT -- Ken Feinberg will disclose details of his plan to compensate victims of General Motors' defective ignition switch during a press conference on Monday, the attorney said today.
"I will be announcing my compensation program next Monday at 10 a.m. here in Washington," at the National Press Club, Feinberg wrote in an e-mail to Automotive News.
GM hired the victim-compensation expert to determine which of the thousands of crashes that happen annually involving Chevrolet Cobalts, Saturn Ions and other cars covered by the ignition-switch recall were linked to the faulty part, and to decide how much to pay victims of those accidents.
Feinberg is not expected to attach a dollar amount to the plan, but his proposal will go a long way toward determining GM's ultimate financial exposure from its handling of the defect, which still is the subject of a Department of Justice investigation and two congressional probes. GM hasn't disclosed an estimate.
GM already has taken a $700 million charge to cover the cost of recalling 2.6 million cars covered by the recall, part of the $2 billion that GM has set aside so far this year to cover the expense of 44 recalls covering 20 million vehicles worldwide. It also paid a $35 million federal fine for its slow action on the switch recall.
Terms of the Feinberg plan also will influence whether victims choose to pursue individual lawsuits against GM. The company is shielded from liability for accidents that happened before July 10, 2009, the day it emerged from bankruptcy, according to terms of its restructuring.
GM executives have said that Feinberg was given full independence to set the criteria for determining which crashes should qualify. "We’ve told him that we want to make sure anybody who suffered harm -- either lost a loved one or suffered serious physical injury because of a defect with the ignition switch -- that they should be part of the program," Barra told lawmakers during an appearance before a House investigative panel last week.
GM has linked the ignition switch to 13 deaths from 54 accidents, all frontal-impact crashes in which airbags failed to deploy because the ignition switch slipped out of the "run" position.
Trial lawyers and safety advocates have argued that the pool of victims should be expanded to include any accident in which the ignition switch slipped out of run, regardless of airbag deployment, because the subsequent loss of power steering and brakes would be enough to cause the driver to lose control.
Barra appeared to acknowledge the possibility of an expanded victims' pool during a House panel hearing last week.
Asked by Rep. Morgan Griffith, R-Va., whether crashes in which the ignition switch caused a stall but the airbag was not the problem should count, Barra replied: "If the ignition switch was part of the issue, we want them in the program, and there are other incidences."
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