GM settles California suit over alleged defects concealment

“We must protect our consumers from businesses that put profits over people by keeping cars on roads safe and avoiding preventable accidents,” District Attorney Tony Rackauckas said in a statement. (Photo: Tony Rackauckas/Twitter)

SANTA ANA, Calif. — General Motors has agreed to a $13.9 million settlement with Orange County, California, after prosecutors accused the auto giant of concealing serious safety defects to avoid costly recalls and part replacements.

The lawsuit, filed in 2014, accused GM of deceptive business practices and unfair competition. It alleged the automaker marketed its brand as safe and reliable while failing to disclose defects including power steering, air bag and brake problems. As a result of the failures, at least 124 people died and 275 were injured, according to the Orange County Register .

Earlier this month, GM agreed to pay $120 million to resolve claims from 49 states and the District of Columbia over faulty ignition switches. The California Attorney General’s Office received $7 million in the settlement.

In a Friday statement obtained by the Register, the company said: “GM has reached a constructive settlement with Orange County, Calif. to resolve claims filed by the Orange County district attorney regarding the company’s advertising of vehicles that were subject to certain recalls in 2014, including the ignition-switch recall.”

Prosecutors said GM trained its staff to never use the words “defect” or “stall” and routinely chose the “cheapest part supplier without regard for safety.” The lawsuit said the company also discouraged employees from addressing safety issues, according to the newspaper.

Over five months in 2014, GM was forced to recall 17 million vehicles in 33 recalls for various defects, officials said.

“Since 2014, GM has taken important steps to help ensure the safety of its vehicles, including a new organizational structure dedicated to global vehicle safety and a robust Speak Up for Safety program,” the company’s statement added.

The settlement in Orange County was approved by a judge on Friday.

“We must protect our consumers from businesses that put profits over people by keeping cars on roads safe and avoiding preventable accidents,” District Attorney Tony Rackauckas said in a statement. “We must also encourage all businesses to be fair and live up to safety standards, and must not allow those engaging in unfair practices to punish those businesses that don’t cut corners by compromising safety.”