General Motors, the largest US automaker and the third-biggest in the world, is facing increased pressure from the mounting litigations over last year’s scandalous ignition switch recall debacle.
At the beginning of 2014 the company started a recall of 2.6 million cars equipped with potentially fatal ignition switches, with subsequent investigations (internal and external) showing the automaker was late in issuing the safety campaign at least a decade. The scandal and regulatory and criminal probes led to an unprecedented level of recalls for the company. Additionally, besides having established a victims’ compensation fund, the carmaker is also faced with numerous regulatory probes and even a criminal investigation. Not to mention the over 150 consumer lawsuits over the flawed part, which could shut down the engine while driving, cutting power to critical safety systems, including the airbags.
Among the numerous lawsuits, one recently made the headlines: investors of the company asked a Delaware judge to allow their ongoing lawsuit against the automaker’s board of directors – considering that past and current executives failed to do their job while the company built cars that were prone to fatal accidents. According to the latest report from the attorney in charge of the company’s compensation program, more than 60 persons died in related accidents and also more than 100 persons were injured seriously. If the litigation is allowed to proceed at least a dozen current and former GM directors would stand trial because they allegedly failed to adequately oversee the company’s operations for about three years starting in 2010 and had no strategy to make sure the company built safe cars or at least reported the problems to the proper government authorities.