A new lawsuit has been brought against General Motors, saying the US carmaker should pay up to $10 billion in compensation to millions of car and truck owners for reduced resale value, following a number of recalls and a fatal delay in implementing recall of cars with faulty ignition switches, which has negatively affected its brand.
A complaint filed on Wednesday with a Riverside, California court said GM hurt customers when it hid defects it knew and giving cost-reduction precedence over safety, which eventually caused about 40 recalls that include more than 20 million vehicles in 2014 alone, Reuters reported.
The lawsuit said the GM failure resulted to an array of late-model cars to lose their resale value by between $500 and $2,600.
Hagens Berman Sobol Shapiro, the firm which brought the lawsuit, said it expected about $10 billion in compensation in the case. The suit is the first that seeks to compel GM to pay a possible 15 million customers, including those whose cars were not affected by the recall, for damage to the company’s brand and image.
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The suit comes as GM CEO Mary Barra faces a new round of grilling by a house panel on Wednesday. The ex-US attorney who compiled GM’s internal report on the circumstances under which the company delayed by more than 10 years the recall of 2.19 million US small cars with fatally defective ignition switches joined the house panel.
According to USA Today, another recall of 3.16 million US GM vehicles with ignition switch defects on Monday is likely to expose Barra to severe questioning as happened earlier.
“This latest recall raises even more questions about just how pervasive safety problems are at GM. as GM taken all necessary actions to fix the issues?,†Energy and Commerce Committee Chairman Fred Upton posed.
To contact the reporter on the story: Yashu Gola at yashu@forexminute.com
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