General Motors (GM) was aware of faulty ignition switches on Chevrolet Cobalts and other small cars manufactured by them for more than a decade, but it didn’t recall them until 2014. On 2.6 million of their vehicles worldwide, the switches can slip out of the “on” position, causing the cars to stall, knocking out power steering and turning off the air bags.
Feinberg, who was hired by the automaker to handle death and injury claims, released new totals on Monday. The deputy administrator of the compensation fund says she expects a flurry of claims before Saturday’s deadline, and she also expects the number of deaths and injuries to rise, which means the number eligible for compensation may end up much higher than 50. Claims filed by mail will continue through next week and will be considered as long as they are postmarked by Saturday.
Last year the company set aside $400 million to make payments, but acknowledged that could grow to $600 million. The company’s chief financial officer told analysts earlier this month that those numbers have not changed. Compensation for each individual death starts at $1 million.
Feinberg is among the nation’s most prominent compensation experts. No stranger to high-profile wrongful death and injury compensation, he previously handled settlements to victims of the 9/11 terrorist attacks and the BP oil spill.
Camille Biros, deputy administrator for Feinberg, said that so far the GM claims are following the usual pattern for compensation cases with a large number of claims at the beginning, a lull in the middle, and a large number toward the deadline.
“We’ve had a busy month already. We’re expecting that in the last few days of this week… we’ll get a lot of claims in.”
The ignition switch brouhaha, which brought congressional and Justice Department investigations and the maximum $35 million fine from the government’s auto safety agency, began a company wide safety review. That brought a total of 84 recalls involving more than 30 million vehicles. As of Friday, GM had fixed just over 56 percent of the 2.19 million cars with faulty ignition switches that are still on the road in the U.S., according to documents filed with federal safety regulators. Frighteningly, the company said it could not reach about 80,000 of the car owners.
Unbelievably, even with letters, telephone calls, and Facebook messages, GM hasn’t been able to get all the owners to have their cars repaired about a year after the recalls started. It’s not unusual for some car owners to ignore recall notices. The average completion rate 1 1/2 years after a recall begins is 75 percent, according to the National Highway Traffic Safety Administration. With this particular high-stakes, high-prominence and high death rate, GM assumed the compliance rate would be higher.
Of course, not everyone who submitted a claim has been deemed eligible, either. Feinberg, in an Internet posting, said as of Friday that the families of 50 people killed and 75 people injured are eligible for payments. The fund has received 338 death claims and 2,730 claims for injuries. Of those, 58 death claims have been rejected as ineligible for compensation, as have 328 injury claims. The details of why these were rejected is not known at this time. Feinberg is either reviewing or awaiting documentation on 230 additional death claims and 2,327 injury cases, in which case the number of eligible claims could considerably grow.