Suit Seeks $10 Billion Compensation For GM Vehicle Owners Over Brand Damage

(paul bica)

If you’re keeping a running tally of the General Motors ignition switch defect lawsuits, you can add one more. The company faces a new lawsuit seeking compensation – in the tune of more than $10 billion – for owners of who have lost resale value on their GM vehicles.

Filed in California federal court, the lawsuit aims to compensate millions of late-model GM car and truck owners for the lost resale value of their vehicles because of damage done to the brand as a result of the company’s never-ending recalls and delay in acknowledging the defective ignition switch problem, Reuters reports.

The suit seeks class-action status for consumers who owned or leased GM made vehicles between July 10, 2009 and April 1, 2014, or who later sold such vehicles at lower prices.

Officials with Hagens Berman Sobol Shapiro, the firm that filed the lawsuit, said the case is first seeking to force GM to pay a potential 15 million vehicle owners. The damages wouldn’t be for owners of recalled vehicles, but owners of all GM manufactured cars.

The complaint alleges that GM hurt consumers by concealing known defects and valuing cost-cutting over safety.

“GM’s egregious and widely publicized conduct and the never-ending and piecemeal nature of GM’s recalls has so tarnished the affected vehicles that no reasonable consumer would have paid the price they did when the GM brand meant safety and success,” the complaint said.

The plaintiff in the lawsuit tells Reuters that had GM done a better job of disclosing vehicles defects, she would not have bought her used 2010 Buick LaCrosse, or at least paid less for it.

While officials with GM declined to comment specifically on the lawsuit, they don’t seem too concerned by any kind of brand damage.

A spokesman for the company tell Reuters that customers still recognize the strength of the company’s brand and that the market recognition has resulted in increased sales, transition prices and residual values.

At this point the company’s recall total is $2 billion for the year. In all, GM has issued 44 recalls this year totaling more than 20 million affected vehicles worldwide – 17.7 million of which are in the United States.

GM hit with $10 billion lawsuit [Reuters]

by Ashlee Kieler via Consumerist