GM settles California county recall case for $13.9 million

The GM logo is seen at the General Motors Lansing Grand River Assembly Plant in Lansing, Michigan October 26, 2015. Photo taken October 26. REUTERS/Rebecca Cook

WASHINGTON (Reuters) – General Motors Co agreed to a $13.9 million settlement with Orange County, California after prosecutors accused the Detroit automaker of intentionally concealing serious safety defects including those involving faulty ignition switches tied to nearly 400 deaths and injuries, the company said on Sunday.

An Orange County superior court judge late Friday approved the settlement for alleged violations of unfair competition and false advertising laws for some vehicles recalled in 2014, including the ignition switch recall. Earlier this month, GM agreed to a separate $120 million settlement with 49 states and the District of Columbia over faulty ignition switches and its auto safety practices.

Orange County District Attorney Tony Rackauckas said in a statement that GM failed to disclose defects in power steering, airbag and braking systems.

The largest U.S. automaker had previously paid about $2.5 billion in penalties and settlements over faulty ignition switches that could cause engines to stall and prevent airbags from deploying in crashes. The defect has been linked to 124 deaths and 275 injuries, and prompted a recall that began in February 2014 of 2.6 million vehicles.

GM spokesman David Caldwell said in a statement that since 2014, GM had taken important steps to help ensure vehicle safety, including a new organizational structure and a new program to encourage employees to report potential issues.

GM still faces more than 100 lawsuits in connection with the ignition switch recall, including economic loss and personal injury claims. The only remaining governmental lawsuit is from the state of Arizona.

In 2015, GM paid $900 million to settle a U.S. Justice Department criminal investigation and agreed to three years of oversight by an independent monitor after being charged with wire fraud.

No individuals were charged, but Chief Executive Mary Barra fired 15 people, including eight executives, over the issue. The ignition switch probe prompted an industrywide jump in recalls in 2014 to an all-time high and cast a spotlight on GM’s safety record as Barra testified before the U.S. Congress.

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