GM makes another glaring error related to victim compensation fund

The allegations leveled against General Motors this year have come to characterize a record-setting year of automobile recalls. While many automakers have issued recalls for defects that could jeopardize safety, the GM scandal stands out as particularly egregious.

To recap, General Motors officials testified before Congress earlier this year about defective ignition switches that could turn off the engine (while the vehicle was in motion) if jostled even a little bit. This, in turn, could cut power to important safety features like air bags, power steering and power brakes. The most scandalous part of this fiasco was a revelation that certain GM officials have known about this defect for at least a decade but recalls were not issued until earlier this year.

In an attempt to finally address the problem and compensate victims, General Motors set up a compensation fund and put Kenneth R. Feinberg in charge of it. His previous work includes running compensation funds for victims of the World Trade Center attacks and the Boston Marathon bombing.

The deadline to submit claims had been December 31st, but it was recently extended by one month. Of the car accident claims submitted and reviewed so far, 33 death claims and 39 injury claims have been deemed eligible for compensation. This is a far cry from the 13 deaths originally identified by General Motors.

Since launching the fund, GM has tried to put a positive spin on its own actions by claiming that “our goal with the program has been to reach every eligible person impacted.” If that sentiment is genuine, the company seems to be doing a poor job. It was only earlier this month that the family of the earliest victim identified by GM was contacted. And the family was not contacted by GM.

It was officials from the New York Times who reached out to the family of an 81-year-old woman killed in a 2003 car accident. Because her name was redacted from the public version of GM’s internal report and no one apparently thought to reach out to the family, the victim’s family only recently learned that the compensation program exists and that they are eligible to receive at least $1 million in compensation.

Mr. Feinberg was likely far too diplomatic when he said that GM’s failure to notify the family was “unfortunate.” In light of this blunder, we have to wonder how many other mistakes have been made related to the defect and the decade-long cover-up by General Motors.

Source: The New York Times, “Deadline Extended for G.M. Accident Claims,” Danielle Ivory and Rachel Abrams, Nov. 16, 2014