The settlement between the U.S. government and GM marks the second-largest settlement in U.S. history between an automaker and the government. Image via UPI.

Let’s step back in time to early last year (2014). General Motors had a big problem with the ignition switches in some of their 2003 through 2007 model-year vehicles, so they issued a recall to initiate repairs to affected vehicles. The recall centered around the fact that on these cars, the ignition switch could move from the “Run” to the “ACC” or “Off” position without driver input. This was reported to cause serious problems for numerous owners. These problems included front end collisions, and were the cause of or significantly contributed to the non-deployment of the vehicle’s airbags.

What Vehicles Were Affected by the Recall?

Counting both U.S. and Canadian models sold, the recall affected 1,367,146 vehicles. However, many of these  wee recipients of a voluntarily-issued recall by GM. The recall was completed in two phases. The affected 90,000 vehicles from Pontiac and Chevrolet:

• 2005 through 2007 Chevy Cobalt
• 2005 through 2007 Pontiac G5
• 2005 through 2007 Pontiac Pursuit (Canadian models)

Unaffected vehicles that were issued the voluntary recall:

• 2003 through 2007 Saturn Ion
• 2006 through 2007 Chevrolet HHR
• 2006 through 2007 Pontiac Solstice
• 2007 Saturn Sky

GM was made aware that 95,000 defective switches were supplied to factories and dealerships for installation and repair purposes. The significantly-higher number of recalled vehicles than known affected parts, is due to the fact that there was no way to determine if a repaired vehicle received a defective switch or not.

This expanded number of recalled vehicles, brought the number of known collisions where the ignition switch problem at least contributed to an accident to 31. Thirteen of these involved front seat fatalities. This and the fact that GM hid the problem from federal investigators led to the filing of criminal charges in federal court.

Just Announced Settlement

Although GM agreed to the settlement to end the federal probe, it doesn’t mean that the case is settled. Part of the agreement includes a three-year prosecution-deferment agreement. This means the government can reopen the case within the next 3 years. This part of the deal specifies that GM must hire an independent monitor to oversee its safety practices, which includes its ability to handle recalls and effectively fix defects.

The 2006 and 2007 HHR was effected by the voluntary recall issued by GM. Image via Edmunds.com

In agreeing to this settlement, GM has admitted to failing to disclose to the National Highway Traffic Safety Administration (NHTSA) and the public, that there was a safety defect with the switches that was potentially lethal. GM also admitted to misleading the public about the safety of vehicles that had the defective switches installed.

Speaking on behalf of GM, CEO Mary Barra issued a statement following the announced settlement. “The mistakes that led to the ignition switch recall should never have happened.” according to Barra. “We have apologized, and we do so again today.

We have faced our issues with a clear determination to do the right thing, both for the short term and the long term. I believe that our response has been unprecedented in terms of candor, cooperation, transparency, and compassion.”

GM’s Chairman Theodore M. Solso also issued a statement: “GM’s Board of Directors took swift action to investigate the ignition switch issue, and we have fully supported management’s efforts to regain the trust and confidence of customers and regulators, and to resolve the Justice Department’s investigations. GM’s Board and leadership recognize that safety is a foundational commitment, and the changes the company has made in the last 15 months have made it much stronger.”

Chevy’s 2006-through 2007 Cobalts were part of the ordered recall. Image via Edmunds.com

The agreement still requires court approval, which is expected to come today when the two parties present it to the court. GM is scheduled to be arraigned in Manhattan, at 3:00 p.m. Eastern, in front of U.S. District Judge Alison Nathan. If Judge Nathan approves the deal, the criminal charges against GM will be dropped if they adhere to the terms of the deal.

However, it remains unclear if any individual charges will be levied. According to U.S Attorney Preet Bharara, he has ruled out charges against some individuals, but not all. These negotiations predate a new Justice Department policy requiring companies to identify people who may have committed wrongdoings if they want to receive credit from the Department for cooperating fully.