2:53pm

Mon June 30, 2014
Business

In GM's Payout Plan, End Of The Road Is A Long Way Off

Originally published on Mon June 30, 2014 5:01 pm

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

MELISSA BLOCK, HOST:

This is ALL THINGS CONSIDERED from NPR News I'm Melissa Block.

ROBERT SIEGEL, HOST:

And I'm Robert Siegel. Today, General Motors expanded its recall of vehicles with bad ignition switches, bringing the total of the year to more than 28 million cars. Meanwhile, there is now a plan to compensate victims of crashes involving the defective switches, which have been linked to at least 13 deaths. That program is being administered by Kenneth Feinberg, who also oversaw the 9/11 victims' fund. The payouts involving fatalities begin at $1 million. NPR's Sonari Glinton reports.

SONARI GLINTON, BYLINE: To begin this story, let's listen to this exchange between Kenneth Feinberg and a reporter at a press conference today in Washington. It gives a bit of a sense of how broad the scope of the compensation package Feinberg will be administrating is.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED REPORTER: Will deaths be counted that occurred in a backseat of a car?

KENNETH FEINBERG: Yes.

UNIDENTIFIED REPORTER: Even if they didn't die as a result of an airbag deploying?

FEINBERG: Doesn't matter.

UNIDENTIFIED REPORTER: And what about side impact crashes?

FEINBERG: Doesn't matter - irrelevant. If it's an eligible vehicle, the airbag did not deploy with a driver - driver, passenger, pedestrian, occupant of another vehicle, where the airbag may have deployed - doesn't matter, eligible.

GLINTON: Now, the key part there was the airbag. The problem was with GM vehicles and their ignition switches. In more than 2 million cars, mainly the Chevy Cobalt, it was all too easy to knock the ignition switch out of the run position. That could cause the car to stall. And with the car essentially off, the airbags wouldn't deploy. The other thing is, it took GM more than a decade to take customers about the defect. Now, if the airbag deployed, Feinberg says it means the car was working and any victims aren't eligible. Feinberg says GM is giving up any protection it may have gotten because of bankruptcy and...

(SOUNDBITE OF ARCHIVED RECORDING)

FEINBERG: Anybody who already settled their claim with General Motors, before they knew about this cover-up or this ignition switch problem, may rip up the release they signed and come back into this program.

GLINTON: Feinberg says GM can disagree with any part of his compensation plan, even with the total number of deaths or any of his other findings.

(SOUNDBITE OF ARCHIVED RECORDING)

FEINBERG: That's fine but they have to honor it. And they have to pay the claim. And they cannot refuse, under the protocol, to pay any final determination that we make on the grounds that it's a mistake. We heard you GM. We respect your right to disagree. We've decided it. And that's the end of it.

GLINTON: Feinberg says while there is not a cap to how much money can pay out to individual claimants, he is limited in the scope of what he's been called on to do.

(SOUNDBITE OF ARCHIVED RECORDING)

FEINBERG: I'm here to compensate victims, not punish General Motors. I'm here to compensate victims, innocent victims.

CLARENCE DITLOW: This big issue in this program is the burden of proof is on the consumer to prove that it was the ignition switch that caused the crash that they were involved in.

GLINTON: Clarence Ditlow is with the Center for Auto Safety. He says he's worried that some valid claims will slip through.

DITLOW: There may not even be a police record because they're only held for up to five years in many states. So it's the consumer's word that it was the ignition switch. And is that going to be enough?

GLINTON: Ditlow says it's right for GM to be compensating victims. And so far, the plan is adequate to fit some of their needs.

DITLOW: But in terms of penalizing General Motors for what they did in the past and making them a good corporate citizen in the future, that's left for something outside this program.

GLINTON: Meanwhile, the problems for General Motors continue. Just hours after Feinberg announced a compensation plan, the company announced six new recalls involving nearly eight million cars. That adds to the company's record number of recalls and the growing price tag for GM's troubles. Sonari Glinton, NPR News. Transcript provided by NPR, Copyright NPR.