/ General Motors, News, Safety / Barclays Analyst Says GM to Pay More Than $2 Billion Settlement for Recalls

Barclays Analyst Says GM to Pay More Than $2 Billion Settlement for Recalls

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Barclays Analyst Says GM to Pay More Than $2 Billion Settlement for Recalls

Barclays analyst Brian Johnson believes that US automaker General Motors will ultimately go for a settlement fund of between $1-$1.5 billion for the customers affected by the recalls.

Brian Johnson released a research note in which he says that GM might offer the cash through its bankruptcy estate, Motors Liquidation Co. this could help the US automaker keep its protection against pre-bankruptcy liabilities. The automaker might also have to pay a federal fine of $1 billion, similar to Toyota’s situation.

“Notwithstanding the lack of legal liability, we believe GM will craft a settlement to put the issue behind it,” Johnson said.

Johnson added that GM might make public a settlement strategy before CEO Mary Barra’s testimony in front of the Congress next week.

“I’d simply say that GM’s first focus is on ensuring the safety and peace of mind of our customers involved in the recall and fixing their vehicles,” GM spokesman Greg Martin said in an e-mail.

It is not sure whether the possible settlement would cover only the customers that have been involved in accidents or all customers owning Saturn Ion and Chevrolet Cobalt vehicles 2003-2007 model years. The faulty ignition switches in GM’s vehicles have been tied to 12 deaths and 31 accidents.

by Mircea Serafim (my Google+) - Thursday, March 27th, 2014 - filed under General Motors, News, Safety. Image credit: .
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