GM: We're Giving $400M to Ignition-Switch Victims

General Motors reveals compensation plan in 2nd-quarter earnings report
By Jenn Gidman,  Newser Staff
Posted Jul 24, 2014 10:31 AM CDT
GM: We're Giving $400M to Ignition-Switch Victims
In this Aug. 21, 2008, file photo, a Chevy Cobalt moves on the assembly line at the Lordstown Assembly Plant in Lordstown, Ohio.   (AP Photo/Ron Schwane, File)

Just one day after General Motors recalled another 717,950 vehicles, the New York Times reports that the automaker estimates it will pay out $400 million to victims of its faulty ignition switches. The compensation plan was included in GM’s report of its second-quarter earnings, which dropped 84% from last year due to money invested in future safety initiatives and recall costs. GM said it took the $400 million pretax charge, as well as an $874 million pretax charge to account for potential recall expenses over the next decade, the AP reports. The company’s financial officer says the compensation estimate is just an approximation and that there’s no limit on the program. (More General Motors stories.)

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