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GM ignition switch recall issue – company to pay USD 900 million fine to defer prosecution

GM ignition switch recall issue - Chevrolet Cobalt

The legal agreement gives GM time of 3 years to set the record straight by letting an independent monitor to review and assess its policies and procedures regarding safety issues and recalls.

American auto giant GM has announced that it has agreed to a Deferred Prosecution Agreement with U.S. Attorney’s Office for the Southern District of New York regarding the company’s handling of the ignition switch safety recall issue.

As per the settlement, GM is required to pay a fine of USD 900 million in exchange for deferral of the prosecution of charges against the automaker related to the ignition switch defect and recall by three years. On the event of GM satisfying the terms of agreement in the next three years, federal prosecutors will seek to dismiss the charges with prejudice.

The terms of the agreement goes as follows:

GM is required to cooperate with the federal government and establish an independent monitor to review and assess the company’s policies and procedures in certain discrete areas relating to safety issues and recalls. GM will also pay a $900 million financial penalty associated with this Agreement and will record a charge for this amount in the third quarter.

Chevrolet Silverado

GM ignition switch recall issue has made the auto giant make several changes to its policies and procedures (image of Silverado is used for representative purpose only).

Talking about the ignition switch fiasco, Ms. Mary Barra, CEO, GM said, “The mistakes that led to the ignition switch recall should never have happened. We have apologized and we do so again today”. She added that the company is determined to do the right thing in both long and short terms.

More details on GM’s side of the story can be found in the news release below.

News Release


About the author

Nithyanandh Karuppaswamy

Winner of national level automotive quiz competitions, Nithyanandh aka Nithz jumped into the blogosphere right after gaining a degree in Mechanical Engineering. Love for automobiles and an even greater drive to share his knowledge with the automotive community, Nithz is Deputy Editor at RushLane.

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