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 has agreed to pay $120 million to resolve claims from 49 U.S. states and the District of Columbia over faulty ignition switches, state attorneys general and the company said on Thursday.
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 the Detroit automaker had reached a settlement with states over the more than 3-year-old consumer protection investigations.
“GM will continue ongoing improvements it’s made to ensure the safety of its vehicles,” Caldwell said. These include retaining a new organizational structure devoted to global vehicle safety and a program that encourages employees to speak up about possible safety issues.
New York Attorney General Eric Schneiderman said in a statement GM had “turned a blind eye for years and chose to conceal the safety defects associated with several models of their vehicles.”
Under the settlement, GM dealers must not sell certified pre-owned vehicles with uncompleted recalls, and is required to have a team to “improve and enhance recall awareness to car owners with open recalls.”
Some states said they would use settlement funds to investigate and prosecute future deceptive practices.
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.
GM shares closed up 0.5 percent at $45.35.
No individuals were charged, but Chief Executive Mary Barra fired 15 people, including eight executives, over the issue. Barra said last week the ignition recall was “a moment in time where the company committed deeply to safety.”
The states said GM knew as early as 2004 that the ignition switch posed a safety defect because it could cause airbag non-deployment, but company officials decided it was not a safety concern and delayed recalls.
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The issue 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.
The company still faces some lawsuits in connection with the ignition switch recall, including economic loss claims.
