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A Times Editorial

Editorial: GM payment plan a step to right wrongs

No amount of money can replace a life or lessen the impact of serious injury. But General Motors' recent announcement that it will move swiftly to compensate victims of crashes in cars with faulty ignition switches is exactly what the company should do to take responsibility for its mistakes. GM has finally admitted its decadelong error and should hasten to make right its contract with consumers who have suffered because of the company's deceit.

Kenneth Feinberg, an independent claims administrator hired by GM to craft the company's victim compensation plans, said the company has not set a limit for the amount of money it will spend on victim payments. Eligible recipients will be limited to victims and the families of those killed or injured in one of the 2.6 million small cars GM recalled earlier this year because of faulty ignition switches. When bumped, the switches caused the engine to shut off and rendered air bags inoperable. The company, which has acknowledged at least 13 deaths and 54 injuries because of the faulty ignition switches, knew about the problem for at least 10 years before issuing a recall in February.

Crash victims or their relatives, including people who have reached settlements with GM, will be eligible to receive $1 million for each death and $300,000 for a spouse and each dependent. A victim's lifetime earning potential also will factor into compensation offers. GM will not consider driver negligence, such as driving under the influence, texting or speeding when it evaluates claims. And the company will allow claimants with incidents that occurred before its 2009 bankruptcy agreement to seek compensation. The announcement came just hours before GM issued yet another massive recall. This time, the company recalled 8.4 million automobiles with ignition switch problems. So far this year, GM has recalled 29 million automobiles in North America. GM expects safety repairs to cost the company $2.5 billion this year, a figure that does not include potential victim payouts.

As GM continues to march through this devastating period in its history, it should not haggle with the relatives of the dead or the injured. The company, which says many claims will be processed in as little as 90 days, should pay up and move on. If claimants are unhappy with Feinberg's offer, they should take their cases to court, where they should find a contrite GM ready to work out a deal. GM should not enter into protracted battles with victims who have already suffered enough.

It should not have taken a total meltdown for GM to be accountable for the quality of its products and recall them at the first sign of systemic failure. The company appears headed toward addressing its considerable wrongs. But even with seemingly endless recalls, criminal investigations, congressional scrutiny, a $35 million fine and the firing of 15 GM employees in June, government regulators cannot trust GM to police itself. It will take a concerted effort by the government, the company and the public to ensure GM remains accountable.

Editorial: GM payment plan a step to right wrongs 07/11/14 [Last modified: Friday, July 11, 2014 2:27pm]

    

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