GM, Buyers Near Pact in Suit on Transmissions

Associated Press

General Motors Corp. and car owners have reached tentative agreement to settle claims that the auto maker put defective transmissions in cars from 1976 through 1980, an attorney said Thursday.

Under the agreement, which requires approval by U.S. District Court in Chicago, GM would put $17 million in a fund to provide partial reimbursement to owners whose transmissions failed within 50,000 miles, said Beverly Moore Jr., an attorney who filed the original lawsuit.

The agreement would require GM to put an additional $2.5 million into the fund if needed to settle the claims, Moore said.

Class-Action Suit

About 4 million GM vehicles equipped with Turbohydramatic 200 automatic transmissions are involved in the class-action lawsuit, Moore said.

The lawsuit, filed against GM in 1979 in Chicago, alleges mechanical and hydraulic problems led to premature failure of the transmission.

It said the transmissions installed in mid-size and larger cars were poorly designed and made of poorer quality material than GM's larger Turbohydramatic 350 model.

Transmission Called 'Unfit'

The model 200 transmission is "unfit for the ordinary purposes for which automobiles are used," the lawsuit said.

J. David Hudgens, GM spokesman, said: "We regard settlement discussions as confidential and we will have no further comment."

Should the settlement be approved, owners of the cars would be able to recover part of the cost of repairing transmissions that failed within 50,000 miles, Moore said.

Failures within the first 24,000 miles would be reimbursed at 90% of cost; 24,000 miles to 36,000 miles, 80%, and 36,000 miles to 50,000 miles, 60%, Moore said.

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