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GM will pay $900 million criminal penalty in ignition switch case

GM will pay $900 million criminal penalty in ignition switch case

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Reuters reports that federal prosecutors have reached an agreement with General Motors today over defective ignition switches that will see the company admit to misleading regulators and consumers, pay some $900 million in fines, and agree to the installment of an independent monitor to oversee compliance. The defective parts — which could effectively turn off the engine in a moving car, disabling safety systems and power steering — have been directly attributed to over 100 deaths.

The severe action comes less from the defects themselves and more from GM's response to them: documents uncovered in court showed that the company had systematically failed to understand the severity of the problem and failed to take action on it. Even after recalls began in earnest last year, they happened in wave after wave, often without adequate supply of the parts needed for the necessary repairs. In all, many millions of cars are affected across six brands in the US alone.

There are still civil suits looming

The $900 million figure is particularly notable because Toyota agreed to a record $1.2 billion fine last year over similar charges — the "unintended acceleration" scandal — but it's believed that GM was able to negotiate a lower number due to its comprehensive cooperation under CEO Mary Barra, who was promoted to the role in late 2013 just as the ignition switch problem came to a full boil.

No individual GM employees or ex-employees are expected to face criminal charges as a result of the probe, though the company's problems aren't over: it still has to deal with many dozens of civil lawsuits and claims that will cost it hundreds of millions of dollars. (Notably, the company just announced a settlement of "certain civil litigation" that will run $575 million.)