GM has been at the center of a raging controversy and some of the biggest recalls in automotive history over the last year or so. The company has had a myriad of problems, but the biggest of the recalls is the ignition switch problem that has been linked to several deaths. GM has now offered an estimate of what it will cost to pay victims of the ignition switch recall at $1.2 billion.
GM has hired a disaster compensation expert to administer a victims fund and claims will begin being accepted on August 1. The fund is uncapped and for now, the number of victims who are qualified for payments from the fund is unknown.
Some analysts estimate that the total cost of fines and settlements GM faces could total as much as $7 billion. GM is expected to fight lawsuits that are tied to accidents that happened before it exited bankruptcy in July 2009. For now GM has taken a single-time $1.2 billion recall cost from its earnings.