Another day, another calamity for General Motors. The beleaguered manufacturer is now staring down the barrel of $10 billion in lawsuits from the disgruntled owners of vehicles affected by the ignition switch recall. Meanwhile, a board of judges will get together and figure out whether to combine the 79 individual lawsuits into one, big suit.

Most of the 79 suits allege that the ignition switch problem has lowered the resale value of the recalled vehicles, while some are arguing directly against GM's bankruptcy defense, claiming the company, as successor to Old GM, remains liable. One suit even alleges that Old GM committed "deceptive and unfair acts and omissions."

GM is now staring down the barrel of $10 billion in lawsuits from the disgruntled owners of vehicles affected by the ignition switch recall.

As we've reported previously, GM has asked the US Bankruptcy Court to invalidate suits relating to economic loss, citing the Old GM/New GM argument. This is in contrast to death and injury claims, which the company is in the process of negotiating.

There seems to be empirical evidence opposing claims of lost resale value. The Detroit News cites ALG, which discovered that used prices of Chevrolet Cobalts affected by the recall have only dipped $300 relative to the average vehicle in the class.

"Similar to Toyota's widespread 'unintended acceleration' recall from 2009, GM has seen short-term impacts to its resale values," ALG's vice president of editorial, Eric Lyman, said in a statement according to The News. "It's unlikely there will be any long-term effects, however, and ALG has no reason to forecast lower values than previously projected."

Meanwhile, GM is aiming to revamp its legal department in a bid to eradicate groups that may have delayed the recall internally. The company's general counsel, Michael Milikin, has hired a legal advisor to work with various department heads to streamline the process of reporting recalls or defects in order to prevent another ignition switch recall situation (we're guessing this is part of the push to "empower" employees to report problems). An internal investigation is also being conducted, the head of which, Anton Valukas, said will be handled without any "sacred cows."

Despite this proactive move, there still seem to be concerns that GM establishment types being blamed for keeping the ignition switch recall quiet will continue to thrive in Detroit. For example, Bloomberg points out that General Counsel Milikin has been with GM since 1977. The firm that's assisting with the recall's internal investigation, meanwhile, has been an ally of GM since the 1970s.


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  • 60 Comments
      dohc73
      • 7 Months Ago
      I'd like to say that this is divine intervention, but it's pretty cut and dry. Although part of me thinks that GM is so good at master minding their business that they know exactly what they're doing and still have a way of profiting off of this or coming out ahead.
      BG
      • 7 Months Ago
      "An internal investigation is also being conducted, the head of which, Anton Valukas, said will be handled without any "sacred cows."" No, impossible. I work for one of the largest bureaucracies on earth, and big bloated organizations simply can't clean up and not preserve some of their sacred cows. The are too entrenched and know too many people. Even worse, bosses and executives went up the ladder following a long-established set of procedures and career steps. What is the problem? Look how far I got in my career? How could this possibly not be the correct path?
      Teleny411
      • 7 Months Ago
      I hope that GM will finally learn its lesson about using The cheapest components possible. That policy has just about destroyed the company. It's a lesson that some other companies would do well to absorb.
      Larry Litmanen
      • 7 Months Ago
      I hope this lawsuit will finish off GM. It's 2008 all over again and this time the parasite will die. And BTW to all people behind the lawsuits and tragedies, it was all avoidable all you had to do was to buy a Honda or a Toyota.
        Dan Nguyen
        • 7 Months Ago
        @Larry Litmanen
        Bro, don't hate. I own a Honda but doesn't mean i wants GM to bankrupt. Competition is good!
          Larry Litmanen
          • 7 Months Ago
          @Dan Nguyen
          Competition is GREAT, and GM can no longer compete. Tesla will replace GM along with other companies. Some other Japanese companies will come back to USA or a number of new Chinese companies will enter USA to replace the vehicles GM did.
          Finklestein
          • 7 Months Ago
          @Dan Nguyen
          I agree. Competition is great! GM vs Toyota - Who will be recall king?
        Titanium Welders
        • 7 Months Ago
        @Larry Litmanen
        You mean during the unintended acceleration period? Splendid!
          Skicat
          • 7 Months Ago
          @Titanium Welders
          Larry and m_2012 = Two guys who haven't the foggiest idea of what they're talking about. When you learn something about how integral GM is to the global auto industry and economy, come back and comment. Otherwise, STFU.
        vince
        • 7 Months Ago
        @Larry Litmanen
        GM has around $27 billion on hand in cash, and is profitable. To even suggest that these lawsuits (which will undoubtedly be drawn out, consolidated, and ultimately settled for a fraction of the claimed amounts) is absurd, almost as absurd as wishing for GM to have been killed off. The damage to the supplier base would have crippled the industry as a whole, over 1 million jobs would have been lost directly, and the loss of tax revenue from those direct job losses, combined with long term unemployment to those employees, would have dwarfed the eventual loss the treasury took on this deal, and that is not counting indirect damage to the economy. Would a traditional bankruptcy have been better? Of course, but 2008/2009 was a crazy time and the government was a major player in screwing up the financial system, so it makes sense for them to have made an exception and stepped in.
          Larry Litmanen
          • 7 Months Ago
          @vince
          Done regurgitating stuff from white house?
          m_2012
          • 7 Months Ago
          @vince
          Do you really believe that? Most suppliers dont even count GM anymore as a strategic partner; meaning they can survive just fine without them. The demand would shift to other manufacturers. To think there would be a vacuum is stupid. The fact that GM has so much cash on hand while building the cheapest piles of crap they can shows what is wrong to the core with that company. Lets not spend it on better products, facilities, or better paid workers. No, lets hoard it and pay out large bonuses to a few billionaires.
          vince
          • 7 Months Ago
          @vince
          Everything I stated in an objective fact. Meanwhile you keep demonstrating your ignorance to the facts while clinging to your extreme point of view, funny how those two things always go hand in hand. Facts are liquidation would have caused 1.1 million people to loose their jobs directly, and another 1.4 million were expected to loose their jobs elsewhere are a result. That is 2.5 million people collecting an average of $279 dollars a week for up to 73 weeks(was extended to 73 weeks during recession). That is $50 billion dollars worth of payments, and it does not factor in the loss from 2.5 million people not paying any taxes during the same time.
          vince
          • 7 Months Ago
          @vince
          Looks like the multiple account having trolls are out in force, comment goes from +6 to -8 in a half hour, Dsiqus sucks...
          vince
          • 7 Months Ago
          @vince
          m_2012, I would agree with you if they were planning on liquidating today, but in 2008/2009 there was no demand, almost none of those workers would have been re-absorbed into the workforce before using up their 73 weeks of unemployment, so even though long term demand and jobs would shift elsewhere it still would have cost more to let then fail. Also, suppliers were on much shakier ground in 2008/2009 then they were now, all it takes is one of them shutting down to bring lines to a halt. Also, if they were in a bankruptcy situation today the government would not need to step in, private money would put up the money for re-organization in exchange for equity in the new company and honestly things would probably have been done a lot more efficiently than the way the government did it (for example, no sweetheart deals for the unions, lots more heads rolling from management etc).
        Genericbeer
        • 7 Months Ago
        @Larry Litmanen
        Yes, because Honda and Toyota have the capacity to produce an extra 2.8 million vehicles (GM sales total for 2013). Get a clue you useless idiot.
      churchmotor
      • 7 Months Ago
      Obama is a sly fox. The 11 billion lost on saving GM will be redistributed. Cash-For-Clunkers II
      m_2012
      • 7 Months Ago
      Thanks Obama.
      KC
      • 7 Months Ago
      They should be revamping their engineering department.
      NY EVO X MR GUY
      • 7 Months Ago
      As much as I can't GM, this bothers me. GM has enormous potential. But, like any great idea, greed and corruption can ruin it. car ownership is a symbol of independence and hard work. To not care about a consumer that uses must of their income to purchase a 5 figure vehicle, is a direct spit in the face. All of the top brass should be terminated with no severance pay due to gross negligence.
      johnb
      • 7 Months Ago
      When you reward failure with bailouts, this is what you get. It's like passing a kid through each grade that can't even read. You aren't doing him or yourself any good in the long run.
      mbukukanyau
      • 7 Months Ago
      Well, I wonder how this is going to play out, given the current GM is not the GM that went into the Chapter. Meanwhile, Let me help the trolls out Asian cars have the best quality and Germans know Engineering. Do not buy American, They do not know quality or Engineering. Jaguars are epic, classy and staggering, Europeans have style, America has non of these. They make Junk. but if you must, please buy Ford or Chrysler. GM is Junk.
        wstr1123
        • 7 Months Ago
        @mbukukanyau
        The only thing I would add is that most Chrysler products are also junk. Of course, let's not overlook the UAW's role in the demise of GM. Too big to fail... until they do.
        johnb
        • 7 Months Ago
        @mbukukanyau
        Maybe someone over at the VA can help GM figure out a way to eliminate it's "problems" I just heard it on the news yesterday like all of you,....
        bootsnchaps60
        • 7 Months Ago
        @mbukukanyau
        How about the rebadged Asian Daewoos which seem to be at the root of some of the quality issues in GM now and probably through the current recalls (can't seem to determine if the Cobalts were Opels or Opels that were Daewoos).
      Chsutera
      • 7 Months Ago
      Wow, There is a HUGE amount of ignorance in the comments. I notice any articles about GM bring the trolls out of their caves.
      D23
      • 7 Months Ago
      Why is everyone claiming there would be a huge loss of jobs? Most of GM would be bought out as previously stated. The biggest hit they would take would be in the truck department and IMO hyundAi would love to take that over as they have future plans of a full size pickup. Kia/ Hyundai is a massive company overseas owning several diff nameplates and able to make massive payouts on a seconds notice it would all end up just fine GM the nameplate would be no more. PleAse stop and think before you reply with your huge loss of jobs bs
        mbukukanyau
        • 7 Months Ago
        @D23
        Where are all the Television and Radio engineering jobs in America since we lost that industry? How many home electronic companies are listed on our bourse? How many are on your 401K..
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