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NYT: Board Members Slow to React to GM Safety Recall Lawsuits

A report from the New York Times shows that the board of directors of the “New GM” were slow to react to the events that led to a series of GM safety recall lawsuits. The company reorganized after bankruptcy proceedings and a government-sponsored bailout in 2009. A condition of the bailout was that the company was supposed to increase their vigilance on vehicle safety issues. However, a string of recalls, including a massive recall on more than 3 million vehicles with defective ignition switches, has spurred hundreds of GM safety recall lawsuits.

GM Safety Recall Lawsuits Worry Shareholders

The board has come under scrutiny from company stockholders. Aside from the GM safety recall lawsuits, the company also faces claims from shareholders that the board breached its fiduciary duty, as well as investigations from the Securities and Exchange Commission, the Justice Department and 45 state attorneys general. A shareholder lawsuit filed by a St. Louis police pension fund, not directly related to the GM safety recall lawsuits, claimed that the board was “guilty of a sustained and systemic failure” and established “a system that is calculated not to inform them about safety issues.”

Internal Report Spurs GM Safety Recall Lawsuit

Directors were supposedly unaware of the issues until an internal report released earlier this year found that employees attempted to cover up the flaw in the ignition system that sparked numerous GM safety recall lawsuits. When the company issued an initial recall in February for vehicles with the defective ignitions switches, Chairman of the Board Theodore M. Solso told a reporter that he “can’t remember the specifics” of the meeting where the board discussed the recalls, other than “it was a large recall.”

GM Safety Recall Lawsuits Shake Up Company Brass

The ignition switch flaw, the damning internal investigation and the deluge of GM safety recall lawsuits have left the automaker’s top brass in a state of disarray. Mr. Solso told the Times he was “stunned” and “shocked” at the revelations in the internal report, which showed how dozens of GM engineers, inspectors and quality control staff consistently failed either to report or to repair the switch problem. The report also cited at least 13 deaths and 50 injuries related to the switch design flaw, but numerous GM safety recall lawsuits have attributed at least 100 deaths and hundreds more injuries to the problem.

Source: New York Times

Know Your Rights in a GM Safety Recall Lawsuit

To find out how we can help you with a GM safety recall lawsuit, contact us today at 877-892-2797. Our friendly staff will ask a few questions about your case and connect you to a GM safety recall lawsuit attorney. You can also fill out the “Free Case Evaluation” form at the top of this page.