What a tragedy. GM announced today through Attorney Kenneth Feinberg that families of at least 64 people killed in crashes caused by defective General Motors (GM ) ignition switches will get compensation from the company. Mr. Feinberg was hired by GM to compensate victims. His report is up from 57 deaths last week. An additional 108 injured people also are eligible for compensation.
Since the fund was created, it has received a total of 4,343 claims by the Jan. 31 deadline. Of those, 1,571 are under review and 742 were deemed not eligible. Those that were ineligible were said to lack documentation or were deficient.
GM knew about problem switches in Chevrolet Cobalts and other small cars for more than a decade but recalled them only last year. They can slip out of the “on” position, which cuts off the engine, knocks out power steering and turns off air bags.
Feinberg and his staff have the discretion to calculate the amount of each eligible case’s compensation. The applicant can accept or reject it. An applicant can sue GM if he or she rejects the settlement offer, but must agree not to sue if the offer is accepted. Initially, GM had said at least 13 people had died in crashes caused by the switches, but the company has always said the toll would rise. Legislators have estimated that at least 100 people were killed. Last year GM set aside $400 million to make payments, but now say it could grow to $600 million. The company’s chief financial officer told analysts earlier this month that those numbers have not changed. GM has placed no cap on the amount of money he can spend, Feinberg has said.
GM recalled 5.88 million vehicles in the U.S. to fix the problem, making it the fourth-biggest auto recall in history, according to the National Highway Traffic Safety Administration.