GM rarely weighs in on victim compensation claims

By Mike Colias, Crain News Service

DETROIT (Feb. 9, 2015) — General Motors Co. has played the role of infrequent adviser in the handling of its compensation fund for victims of its defective ignition switch.

The auto maker so far has provided input in just 89 of the 4,180 claims that were submitted to attorney Ken Feinberg ahead of the Jan. 31 filing deadline, the fund's deputy administrator, Camille Biros, said last week.

Under terms of the program, both GM and the claimants “have the opportunity to say, ‘Oh, I'd like to tell you something more about this claim,'” Ms. Biros said in an interview. “But GM does not get involved in the review of the claims at all.”

In most of those 89 cases, GM offered engineering insight — its own interpretation of data from the car's black-box data recorder, for example. Rarely did the feedback affect the outcome of a decision, she said.

GM hired Mr. Feinberg last spring to independently oversee the victim compensation process in the wake of its recall of 2.6 million older small cars to replace the faulty ignition switch. A GM investigation found that the many engineers and attorneys knew for years of injuries or deaths related to the switch slipping out of the run position when jarred, cutting power steering, brakes and airbags.

Through early last week, Mr. Feinberg's office had approved 51 of the 455 death claims received. Each accepted death claim will receive a minimum $1 million payout, and in some cases several times that, based on the program's parameters.

About 12 percent of the total claims had been denied. In most of those cases, the claim was for an ineligible vehicle, Ms. Biros said. One person submitted a claim for a dog, which didn't meet the program's requirements.

GM in November moved the initial filing deadline back by a month to Jan. 31 but dismissed calls from lawmakers to extend it further.

Ms. Biros said Mr. Feinberg's team would finish reviewing claims by late spring or early summer.

Last year, GM estimated the total cost of the compensation program at $400 million to $600 million. In a regulatory filing last week, GM said it had paid $93 million to eligible claimants as of Jan. 30.

This report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.