GM receives over 4,100 injury claims for faulty ignitions

Logo of General Motors. (AFP/Mark Ralston)

NEW YORK: General Motors said on Monday (Feb 2) that it had received more than 4,100 compensation claims for injuries tied to faulty ignitions, including 455 death claims, by its Jan 31 deadline. But so far only 128 of the claims have been deemed eligible for compensation.

Kenneth Feinberg, the attorney in charge of the independent compensation fund set up by GM after recalling 2.6 million cars over the ignition-switch problem since February, reported 51 death claims so far were ruled eligible for compensation, and 110 were under review.

The largest US automaker, which has been taking claims for compensation from victims of the flawed vehicles for six months, reported total claims of 4,180 as of Sunday, the day after the deadline.

Fund spokeswoman Amy Weiss noted that it was too soon to know the final numbers, saying that "many" claims were still arriving through the postal system. The claims had to be postmarked by Jan 31 to be eligible for consideration.

Feinberg told Bloomberg television that hundreds of claims had been received in the last 10 days and it would take "at least a few months to process all of those claims."

The deadline passed despite a plea by two Democratic lawmakers last week for GM to extend it again to ensure all possible victims of accidents linked to the ignition problem, which dates back to the early 2000s, would have a chance to apply. The company already had extended the deadline by one month.

GM launched the compensation claims programme after acknowledging the faulty ignition switch could turn off power to a car's power steering and safety airbags while it is in motion. It took GM nearly 11 years before beginning to recall the cars after hundreds of possible accidents and deaths were reported.

Feinberg said that he was not surprised that GM had originally reported only 13 deaths related to the problem, because the company had been looking at a direct link to the flawed ignition switches.

CIRCUMSTANTIAL EVIDENCE WEIGHED

The compensation fund, by contrast, he explained, is focused on "proximate cause" or circumstantial evidence between the switch defects and the deaths and injuries. "We're much more generous," he added. Feinberg declined to estimate the final price tag of the GM compensation programME.

GM will pay a minimum US$1 million for the victim, US$300,000 for the surviving spouse and another US$300,000 for each surviving dependent. Financial and medical treatment compensation of at least US$20,000 will also be offered to those with eligible physical injury claims from an accident.

As of Sunday, eight claims for crippling injuries such as brain damage or double amputation were deemed eligible, out of 278 filed. Sixty-nine out of 3,447 claims for hospitalisation or outpatient medical treatment were eligible.

Of the total 128 claims deemed eligible, "there is not one person who has turned down the compensation," Feinberg said. Anyone accepting compensation from the fund waives the right to sue GM.

GM is under investigation by Congress, regulators and the Justice Department over why it waited more than a decade after first uncovering the ignition-switch problem to start recalling cars.

Lawyers for many victims have already filed a number of class-action suits that could cost the company far more than its promised payouts under the compensation program.

GM set aside US$400 million in claims-related provisions in its 2014 accounts. The largest US automaker is scheduled to report fourth-quarter and full-year earnings ahead of the market opening early Wednesday.

Last year GM recalled more than 30 million cars worldwide, a record, for problems with the ignition switch and other problems. Despite the recalls, consumers snapped up GM cars last year, pushing the company to record sales of 9.92 million vehicles.