By Mike Colias, Crain News Service
DETROIT (Jan. 29, 2015) — General Motors Co. on Jan. 28 denied a request from two U.S. senators to extend the Jan. 31 deadline for victims of the company's defective ignition switch to apply for compensation.
In a statement, GM said it has “conducted extensive outreach about the program,” contacting more than five million current and former owners of the recalled cars.
“Our goal is to be just and timely in compensating the families who lost loved ones and those who suffered physical injury,” the GM statement said. “We previously extended the deadline until Jan. 31, and we do not plan another extension.”
In a letter sent Jan. 28 to GM CEO Mary Barra that calls the deadline “arbitrary,” U.S. Sens. Richard Blumenthal, D-Conn., and Edward J. Markey, D-Mass., told Ms. Barra that victims should have more time to decide whether to file.
The lawmakers cited two pending factors causing some victims to delay filing: A Department of Justice investigation into whether GM broke any laws in its handling of the defect; and a pending federal court decision on whether GM will keep its liability shield from its 2009 bankruptcy protecting it from lawsuits related to earlier defects.
“Right now, injured parties do not know enough about their legal rights or facts to make an informed decision,” the senators wrote. “Indeed, they cannot have sufficient information until the DOJ concludes its criminal investigation and the bankruptcy court decides whether to lift the liability shield that G.M. now unjustifiably hides behind.”
The lawmakers urged Ms. Barra to extend the deadline until both of those matters have been decided.
The compensation program, which is being administered by victim-compensation attorney Kenneth Feinberg, has approved 50 death claims, seven claims of “catastrophic” injury, and 68 for less-serious injuries since it began taking claims Aug. 1.
An outside investigation commissioned by GM showed that many of the company's engineers, lawyers and other employees knew about the defect for a decade or more before GM issued a recall in early 2014.
Sens. Blumenthal and Markey also expressed concern that GM neglected to notify victims of the recall and compensation fund, including the family of Jean Averill, a Connecticut woman whose 2003 death was among the first 13 fatalities that GM linked to the defect.
The family did not know her crash was linked to the defect until the New York Times informed them in November, according to the family's attorney.
GM spokesman Jim Cain said the Times story about Ms. Averill “was done while our outreach was ongoing,” and that the article “did help us to identify [her case] and reach out faster.”
This report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.