Lawsuit kicks off class action claims against GM

Fri Mar 14, 2014 8:49pm EDT
 
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By Jessica Dye

NEW YORK (Reuters) - General Motors was hit on Friday with what appeared to be the first lawsuit related to the recall of 1.6 million cars, as customers claimed their vehicles lost value because of ignition problems blamed for a series of fatal crashes.

The proposed class action, filed in federal court in Texas, said GM knew about the problem since 2004, but failed to fix it, creating "unreasonably dangerous" conditions for drivers of the affected models.

"GM's mishandling of the ignition switch defect....has adversely affected the company's reputation as a manufacturer of safe, reliable vehicles with high resale value," the lawsuit said.

The recall has led to government criminal and civil investigations, an internal probe by GM, and preparations for hearings by Congress. All ask why GM took so long to address a problem it has said first came to its attention in 2001.

A GM spokesman, Greg Martin, said the company has apologized for how it handled the recall and that taking care of customers was its first priority. He did not comment on the lawsuit.

The plaintiffs are seeking damages from GM that include compensation for loss of the use of their vehicles and repairs and diminished resale value. They are not claiming they were injured in accidents stemming from ignition problems.

The lawsuit is reminiscent of claims faced by Toyota Motor Corp, which recalled more than 10 million vehicles starting in 2009. Toyota last year received approval for a settlement valued at $1.6 billion to resolve economic loss claims and is currently negotiating the settlement of hundreds of personal-injury lawsuits.

GM announced the recall in February, despite learning of problems with the ignition switch in 2001 and issuing related service bulletins to dealers with suggested remedies in 2005.   Continued...

 
General Motors Co's new chief executive Mary Barra addresses the media during a roundtable meeting with journalists in Detroit, Michigan January 23, 2014. REUTERS/Carlos Osorio/Pool