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Economy & Business

GM To Pay $900 Million To Settle Criminal Case Over Faulty Ignition Switches


It's going to cost General Motors $900 million to settle a criminal probe by the U.S. government. The company has admitted it knew of a defective part which could cause vehicles to stall and didn't tell the public about it. At least 124 deaths have been associated with the problem, and millions of cars have been recalled as NPR's Sonari Glinton reports.

SONARI GLINTON, BYLINE: This week marks the beginning of the auto show season. Car executives have been strutting their stuff at their first big car show in Frankfurt, Germany - you know, new cars, new technology, horsepower, all that kind of stuff. Meanwhile, back here in the U.S...


PREET BHARARA: We are here this afternoon to announce the filing of criminal charges against General Motors Company related to the company's failure to disclose a safety defect from its regulator and from certain purchasers of its pre-owned cars.

GLINTON: That's Preet Bharara. His name is very well known in the auto industry not necessarily for good reasons. He's the U.S. attorney for the Southern District of New York. Bharara's office was behind a $1.2 billion fine against Toyota. Now, the GM defect could cause stars to stall and airbags to lose power, but it wasn't that defect, Bharara says. It was how the company handled it.


BHARARA: GM's criminal nondisclosure of the safety defect lasted almost two years. Meanwhile, at least one person died in an accident related to the defective switch during that time period.

GLINTON: GM will have to pay $900 million. That's on top of hundreds of millions of dollars it's paying out through a victims compensation fund. So far, no GM employee will be prosecuted, which may be hard to believe. Bharara says so far, this is as close as he can get.


BHARARA: Now, one thing people should understand about the law - there is actually no existing law specifically designed to impose criminal penalties for this kind conduct - the nondisclosure of safety defects by a car company.

GLINTON: Lawmakers say they want that law to change. Until then, analysts say even though cars are a lot safer than they've ever been, you can count on hearing a lot more about recalls. Sonari Glinton, NPR News. Transcript provided by NPR, Copyright NPR.