Federal prosecutors are working on a settlement for General Motors’s defective ignition switches tied to at least 124 deaths. Art Wheaton, automotive expert and senior extension associate with Cornell University’s ILR School, says that the settlement will be good news for GM investors, employees and victims of the safety defect.
Wheaton says:
“GM has paid out or set aside about $4 billion in settlements and recall costs for the ignition switches and recalled almost 20 million vehicles. The good news for investors is that this settlement should make GM’s future less worrisome with this event mostly in the rear view mirror. Victims and their families can have some sense of relief knowing that GM created a professionally managed settlement fund, admitted guilt and will be held accountable for actions or inactions of the past.
“There is also a mixed view on the decision by the court to disallow claims for the old GM prior to bankruptcy. For the new GM it is a sense of relief. For those whose claims were prior to the reorganization there is less likely to be civil court cases against the old GM.
“This is also good news for current GM employees in the middle of bargaining a new collective bargaining agreement. The more clarity in GM’s future the easier to predict and manage the pay and benefits of current and future GM employees.”
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