G.M. Plans to Pay More Than $400 Million to Victims of Faulty 1gnition Switch

By BILL VLASIC July 24, 2014

DETROIT — General Motors said it expects to pay at least $400 million in compensation to victims of a faulty ignition switch tied to 13 deaths.

The automaker included the estimate in its second-quarter earnings, which dropped 84 percent from a year earlier because of huge recall costs and charges for future safety actions.

G.M., the nation's largest automaker, said it earned $190 million in the quarter, down from $1.2 billion a year ago.

While the company had healthy operating performances in North America and China, the financial toll continued to mount from the ignition switch crisis.

For the first time, G.M. put a cost estimate on the injury and death claims it expects to receive for accidents in 2.6 million Chevrolet Cobalts and other small cars recalled in February for defective ignition switches.

G.M. said it took pretax charges of $400 million for the cost of the compensation program, and said the total could increase by $200 million.

source : http://rss.nytimes.com/c/34625/f/640316/s/3cd2941c/sc/2/l/0L0Snytimes0N0C20A140C0A70C250Cbusiness0Cgm0Eplans0Eto0Epay0Emore0Ethan0E40A0A0Emillion0Eto0Evictims0Eof0Efaulty0Eignition0Eswitch0Bhtml0Dpartner0Frss0Gemc0Frss/story01.htm