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October 20, 2017

GM to pay $1.1M to Maine in ignition-switch settlement

Courtesy / Maine Attorney General's Office
Courtesy / Maine Attorney General's Office
Maine Attorney General Janet T. Mills announced Thursday that the state will receive $1.1 million as part of a nationwide settlement with General Motors Co. over allegations that the automaker concealed safety issues related to ignition-switch defects in its vehicles.

Maine will receive $1.1 million as part of a nationwide settlement with General Motors Co. (NYSE: GM) over allegations that the automaker concealed safety issues related to ignition-switch defects in its vehicles.

Maine Attorney General Janet Mills announced the settlement between GM and the attorneys general of 49 states and the District of Columbian on Thursday, noting that it concludes a multistate investigation into the auto manufacturer's failure to timely disclose safety defects in ignition-switches in certain GM vehicles.

"This intentional deception by GM created a dangerous situation for their customers and for everyone else on the road," Mills said in a news release. "My office will continue to go after deception by any business, no matter how big, that endangers the public."

Background on case

In 2014, GM issued seven vehicle recalls affecting more than nine million vehicles in the U.S. The recalls involved a defective ignition switch which can cause a loss of electrical systems, including power steering and power brakes, according to the Maine AG's office's news release. If a collision occurs due to this defect, the vehicle's safety airbags may also fail to deploy, increasing the risk of serious injury or death in crashes.

Maine and the other states alleged that certain employees of GM and General Motors Corp. (which went through bankruptcy in 2009), knew as early as 2004 that the ignition-switch posed a safety problem because it could cause the airbag to fail.

Despite this knowledge, GM personnel delayed issuing recalls, according to the Maine AG's office. GM continued to market the reliability and safety of its motor vehicles which were equipped with this defective ignition-switch.

The states alleged that the automaker's actions were unfair and deceptive in violation of state consumer protection laws, including Maine's Unfair Trade Practices Act.

Steps to be taken by GM

Under the consent judgment presented to the Kennebec County Superior Court, GM is ordered to not represent that a motor vehicle is "safe" unless it complied with the Federal Motor Vehicle Safety standards applicable to the motor vehicle at issue.

GM also is ordered not to represent that certified pre-owned vehicles are safe, have been repaired for safety issues or have been subject to rigorous inspection, unless those vehicles are not subject to any open recalls relating to safety or have been repaired as a result of a recall.

Finally, GM was told to Instruct its dealers that all applicable recall repairs must be completed before any GM motor vehicle sold in the U.S. and included in a recall is eligible for certification. Also, if there is a recall on any certified pre-owned vehicle sold in the U.S., the required repair must be completed before the vehicle is delivered to a customer.

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