GM To Pay Nearly $1 Billion, Avoid Crime Charges, For Ignition Defects


Federal prosecutors will settle a criminal investigation into General Motors, accusing the automaker of failing to disclose a safety defect tied to at least 124 deaths, the New York Times reports. The case would end a wide-ranging investigation that tainted the automaker's reputation for safety and damaged its bottom line. Prosecutors will impose a penalty of nearly $1 billion on GM and are not expected to charge individual employees. Some GM officials had expected to pay more than the $1.2 billion paid last year by Toyota for concealing unintended acceleration problems. GM has agreed to sign a deferred-prosecution agreement, a deal amounting to probation for corporations.

After a yearlong inquiry into the defect, which involved ignition switches that could unexpectedly turn off, cutting the engine and disabling airbags, federal prosecutors in New York City and the FBI struggled to pin criminal wrongdoing on any one employee. They concluded that the problems stemmed from a collective failure by the automaker. The Times says the case illustrates the limitations of new Justice Department rules that emphasize criminal charges against corporate employees. “If a corporation plays nice and agrees to the terms, then the government gets some nice money, and the victims are just left in the dust,” said Susan Averill, the daughter-in-law of Jean Averill, who was killed in a 2003 crash of a Saturn Ion, the first fatality connected with the ignition defect. “It doesn't seem right to me.”

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