Business Law: General Motors Lawsuit

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Again, GM failed to recall the cars before devastating events. According to consumer law, vehicle manufacturers have a duty to their consumers to report any known safety defects that are associated with their vehicles (Pine, 2014). Therefore, the company failed to follow consumer law regulations. GM stated that they did not believe that the stalling cars should be considered a safety issue since the customer still could control the vehicle. However, as soon as fatalities started to be associated with the ignition switch, GM should have notified the consumers of the switch problems and started the recall process faster.

- Solution found but GM remains unaware

In 2007, a Wisconsin State Trooper, Keith Young, discovered that the ignition switch may have caused the non-deploying air bag. This was not accepted by GM until 2014, however, the report was in GM’s files. GM stated that even though the files were obtained by the company in 2007, neither the lawyers nor the engineers working on the non-deployment cases knew of its existence until 2012 (Gray, 2014).

The report from the state trooper stated that the ignition switch on the vehicle had been in the accessory position when the car hit the trees. Thus preventing the airbags from deploying during impact. Trooper Young also cited the October 2006 technical service bulletin that highlighted the potential of the engine turning off due to the ignition switch. His report found that with a reasonable degree of scientific certainty, the front two airbags did not deploy and it appeared that the ignition switch had somehow been turned to the accessory position before the car collided with the trees (Nelson, 2014).

The file was sent to GM in February 2007, however, forensic evidence showed that no one accessed the file until 2014. A senior manager for GM stated that he obtained Trooper Young’s report in 2007, however, thought it was in connection with GM’s quarterly death and injury report for that year. None of GM lawyers or engineers working on the recall remember being aware of the report until 2014. Therefore, GM lawyers and engineers did not look for information in GM’s files or that was publicly available that was relevant to the airbag non-deployment cases (Gray, 2014).

- Failure to share of gather knowledge

The Trooper Young report was not the only file that the company failed to properly share throughout the company. It had been found that the company failed to search for and share knowledge regarding multiple components throughout the company. In 2004 and 2005, the complaints of the moving stalls were starting to come into the company. However, the engineers who were working on the issue did not know that the vehicle was designed so that the airbags would not deploy unless the engine was completely on.

Therefore, the engineers were unaware that the airbags would not deploy if the ignition switch was in the accessory position. As a result, the engineers failed to recognize the stalls as a safety issue in order to resolve the problem. If they were aware of this situation, they may have been able to find a link between the two issues and been able to fix the problem before more individuals lost their lives (Hays & Krisher, 2015).

From 2007 onwards, the company employees failed to find materials that were publicly available. This included an Indiana University study that had the link between the stalling cars and the airbag non-deployment. Furthermore, from 2011 onward, the fact that the moving stalls led to fatalities was not shared with all members of the company. Therefore, the problem of the moving stalls lack urgency throughout the company (Hays & Krisher, 2015).

Personal and legal opinion

In December of 2013, an outside expert working for the plaintiff took apart two switches and found what took GM years to determine. Throughout the entire eleven years, GM demonstrated no sense of urgency regarding this matter. In 2013, when GM’s recall committee met to decide whether or not to recall the Cobalt’s and the other vehicles that had to switch, the decision was tabled for another six weeks to gather more information. This was mainly due to the fact that the presentation they received regarding the matter failed to alert them of the fatalities associated with the switch. Furthermore, the issue of the ignition switch was passed through several members of GM. From engineers, to investigators, to even their lawyers. However, no one considered this to be a problem for them company (Mansbridge, 2015).

In sum, 2006 to 2010 consisted of five years of failures on GMs behalf. These failures included failure to share or gather basic facts and the failure to investigate and understand how GM engineers had designed their own vehicle (Mansbridge, 2015).

From 2006 to 2011, GM did not worry about the issues related to the Cobalt ignition switch. This was generally due to the fact that they failed to search for or find information relevant to the problem of the non-deploying airbags. Therefore, the company failed to investigate the issue properly (Bubbers, 2015). The company acted negligent on the issues surrounding the ignition switch.

Final outcome

General Motors has decided that they will pay $575 million to settle hundreds of the civil lawsuits filed against the company of their faulty small-car ignition switches. The company recently sat down with Bob Hilliard, a personal injury lawyer in Texas, and reached a deal to settle the 1,385 death and injury cases that were filed due to the ignition switch.

Also, the company settled a 2014 class-action lawsuit that was filed by GM’s shareholders as well. The shareholders filed the class-action lawsuit stating that GM’s actions reduced the value of GM’s, and therefore the shareholders, stocks. On top of the $575 million, GM is also expected to pay a $900 million fine to avoid prosecution in these cases as well (Krisher, 2015).

For the wrongful death cases, Hilliard stated that a special master will be appointed to decide how much each plaintiff will receive from the settlement. Overall, the number of deaths caused by the switches is 169 (45 deaths from current lawsuit and 124 deaths from cases previously settled by GM). Hilliard is estimating that the number of deaths caused by the switch will rise to 250 once all the cases are fully settled. However, even with the settlement, there are still another 454 death and injury cases that remain part of the consolidated claims against GM. GM has also agreed to have an independent monitor appointed to review their procedures for handling