GM Reaches $120m Settlement With States Over Switches

DETROIT (WWJ/AP) - General Motors Co. has reached a $120 million settlement with 49 states and the District of Columbia over its defective ignition switches.

GM recalled 2.6 million small cars worldwide in 2014 because their ignition switches could slip from the "run" position to the "off" position, shutting off the engine.

The switches played a role in at least 124 deaths and 275 injuries, according to a victims' fund set up by GM.

Every state but Arizona sued the Detroit-based automaker, saying it violated consumer protection laws by selling cars even though it knew for at least a decade that the switches were defective. The settlement concludes the state investigations.

The state of Michigan will receive just under $4.3 million in the settlement which, according to the state's attorney general will go into the state's general fund. This is separate from the settlement to victims who were injured or to the families of those killed in GM cars with faulty switches.

GM said in addition to the state payouts, it pledged to continue to improve its vehicle safety efforts.

Background

In 2014, GM issued seven vehicle recalls in response to unintended key-rotation-related and/or ignition-switch-related issues, which have affected over 600,000 vehicles in Michigan. The recalls involved a defective ignition switch which, under certain conditions, could move out of the "Run" position to the "Accessory" or "Off" position. If this occurs, the driver experiences a loss of electrical systems, including power steering and power brakes. If a collision occurs while the ignition switch is in the "Accessory" or "Off" position, the vehicle's safety airbags may also fail to deploy, increasing the risk of serious injury or death in certain types of crashes in which the airbag was otherwise designed to deploy.

As the states alleged, certain employees of GM and General Motors Corporation, knew as early as 2004 that the ignition switch posed a safety defect because it could cause airbag non-deployment. However, despite this knowledge, GM personnel decided it wasn't a safety concern and delayed making recalls. GM continued to market the reliability and safety of its motor vehicles which were equipped with this defective ignition switch -- reads a statement from the Michigan Attorney Generals Office.

(© Copyright 2017 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)