GM will pay 'whatever it costs' to compensate ignition switch victims

The man tasked with handling compensation for victims of faulty General Motors ignition switches says there's no limit to what the company might pay out, or how many victims might come forward.

"GM has basically said 'whatever it costs to fund all the aggregate claims, we'll pay it,'" Kenneth Feinberg said at a press conference on Monday.

One of America's leading compensation experts who stickhandled the compensation plan for victims of the 9/11 attacks, Feinberg said he has been given carte blanche to get to the bottom of the company's growing scandal involving the recall of millions of small cars with defective ignition switches that can cause the vehicles to turn off while in motion, and disengage safety features like steering and airbags.

GM said it is aware of at least 54 accidents related to the issue, in which 13 people died. But victims groups claim the true list includes many many more people, suggesting the costs could go into the millions or billions of dollars.

Feinberg said he will start processing claims starting Aug. 1 until the end of the year, and he encouraged everyone who thinks they were impacted to participate, whether they have already settled with the company or not.

Even those who got into accidents for additional reasons beyond the ignition switches may be entitled to compensation, he said, and they'll receive it within three months.

"Texting [and] speeding [are] irrelevant to this program," he said. "We have no interest in examining any alleged contributory [role] on the part of the driver.

"This is for defective switches, not anybody's driving," he said.

But as much as he opened the floodgates to a wide-ranging investigation of how many defective ignitions there are out there, he stressed that the compensation program will be limited to just that issue and will not include other factors.

"If the airbag deployed, you're ineligible," he said. And crashes that happened before the company's 2009 bankruptcy will also be excluded as per terms of the company's restructuring at the time.

Feinberg will follow the same methodology he used when he handled a $7-billion government fund for victims of the Sept. 11, 2001, terrorist attacks in the U.S. He has detailed formulas setting payments based on a victim's age, earnings potential and severity of injuries.

Factors such as loss of income and even hospital costs will be considered.

Under Feinberg's formula, for example, relatives of a deceased 25-year-old earning $75,000 per year who is married with two children would get $5.1 million. But the relatives could build a case to get more, he said. Severely injured people could get more money than some death cases, Feinberg said. For example, a 40-year-old earning $70,000 per year who is married with no children and became a paraplegic in a crash would get $6.6 million under the formula.

In a statement accompanying Feinberg's press conference, GM said it supports the plan.

“We are pleased that Mr. Feinberg has completed the next step with our ignition switch compensation program to help victims and their families," the company said.

"We are taking responsibility for what has happened by treating them with compassion, decency and fairness. To that end, we are looking forward to Mr. Feinberg handling claims in a fair and expeditious manner.”