GM Coupons Offered in Settlement : Autos: Pickup truck owners will get $1,000 each. The move does not affect recall investigations.
General Motors Corp. agreed Monday to settle more than a dozen class-action lawsuits by giving $1,000 coupons toward the purchase of new GM vehicles to owners of its full-sized pickup trucks built between 1973 and 1987.
Plaintiff attorneys said they believe the settlement is the largest of its kind ever agreed to by an auto maker. They also said it will make it harder for GM to deny there is a safety problem with the trucks in other litigation.
An estimated 4.7 million GM pickups built during those 14 years are on the road, making the company’s total potential cost $4.7 billion. GM said it could not estimate the financial effect of the offer, but said it does not expect a “material adverse impact” on its bottom line.
The pickup trucks are the focus of a federal recall investigation. Federal officials allege that the vehicle’s side-saddle fuel tanks are defective because they are prone to burst into flames in side-impact crashes. GM says the trucks are safe.
The settlement Monday will not affect the recall investigation or several product-liability suits pending against the auto maker, GM said. “The settlements do not involve any recall or modification of the vehicles,” company spokesman William
O’Neill said.
The settlement affects 36 class-action suits filed in federal and state courts across the country. The damage suits claimed the defective fuel tanks caused the trucks to plunge in value.
Under the unusual settlement, the $1,000 coupon can be used by the owner or the owner’s immediate family. Most owners are expected to trade in the vehicles, but those who do not want to purchase a new GM vehicle can sell their coupon for $500.
Houston attorney Tim Crowley, who represented GM pickup truck owners in a suit filed in state court in Texas, said he considers the settlement good for both sides, representing a fair value to owners and allowing GM to put some of the controversy behind it.
“It will make it harder for GM to deny there is a problem,” he added. “It will encourage owners to take these vehicles off the road or reduce the miles they are driven.”
Dianne Nast, a Philadelphia attorney who represented truck owners in the federal suits, said she believes GM agreed to settle because it wanted to avoid an early defeat in the massive litigation affecting these trucks.
She noted that several class-action suits were scheduled for quick trial as the company is also fighting the recall effort by the National Highway Traffic Safety Administration.
The settlement must be approved by the federal court in Philadelphia after a public hearing. All owners must be alerted to the settlement and will be given 15 months to use the certificates.
There were originally 36 class-actions filed nationwide, but 23 were consolidated in the Philadelphia federal court. Other suits were filed in state courts in California, Kentucky, Georgia, Louisiana, Texas, Kansas, Missouri, Oklahoma, Tennessee, Alabama and South Carolina.
