GM’s Plan to Pay $22 Per Car Not Good Enough

Montgomery, ALEver vigilant on this GM file, the lawyers representing families and victims of GM’s catastrophic ignition failure are extremely critical of the $400 million compensation plan as laid out in a report to shareholders. That would work out to about $22 per vehicle according to lawyers.

“This estimation to pay claims for deaths and serious, disabling injuries is totally inadequate, and is not consistent with a no-cap compensation fund,” says Jere L. Beasley from Beasley Allen, whose firm represents GM victims. “The fund doesn’t even include all of the recalled cars, and there have been deaths and injuries involving those cars.”

The evidence shows that as far back as 2005, GM was aware of an ignition switch problem that caused the engine to shut off unexpectedly. GM engineers and executives did not consider the issue to be a “safety problem” and did nothing to change, upgrade, recall or in any way protect drivers from the faulty mechanism.

The company’s CEO, Mary Barra, told legislators in Washington at a special hearing several months ago that “obviously there was problem.”

GM now acknowledges that there were 13 deaths and 54 crashes related to the ignition switch shutdowns. However, the faulty ignition switch was installed in more than 17 million cars and many consumer advocates strongly believe that the number of deaths is more likely in the 300 range.

The long lag period between the time the problem began and the time that GM admitted the error and began the recall is some 14 years. It is possible that many, many more people were injured and have not connected their crash to an ignition switch failure issue.

Attorney Lance Cooper, from Marietta, Georgia, who represents a number of the families injured in the GM ignition switch disaster says “$400 million is an arbitrary number.

“And if GM is really serious about giving the head of the compensation team, Ken Feinberg, complete discretion to make awards, that $400 million number is irrelevant,” he adds.

“What is most important is that Mr. Feinberg does the right thing and makes full and complete awards for all eligible claims regardless of the ultimate total amount awarded,” says Cooper. “If he does that, given our understanding of the number of claims, the number will certainly wind up being much higher than $400 million.”

Both lawyers consider the $400 million number offered to shareholders as an estimate to be “especially low” given that GM is trying to keep victims from filing claims against the “Old GM” - arguing that all accidents that happened before GM went bankrupt during the financial crisis would have to be compensated from the fund because a defunct company can’t be sued.

“They would also be shut out of the right to trial by jury, thus avoiding punitive damages,” says lawyer Beasley.

“On June 5, GM CEO Mary Barra told the public and her employees that GM is going to do the right thing for the affected parties,” comments Beasley.

“Apparently, somebody else at GM is now calling the shots on the automaker’s litigation strategy. It’s time for GM to quit playing games and come clean about its massive safety problems.”

GM is also the target of several other class actions related to defective windshield wipers, faulty intake manifold gaskets and transmissions.


Lance Cooper founded The Cooper Firm in 2006. With experience in substantial personal injury and wrongful death cases, he has represented plaintiffs in numerous civil jury trials and has successfully prosecuted hundreds of cases and gained multimillion-dollar verdicts and settlements on behalf of his clients.

Headquartered in Montgomery, Alabama, Beasley Allen is comprised of more than 75 attorneys and 200 support staff. Beasley Allen is a national leader in civil litigation, with verdicts and settlements in excess of $22 billion.