GM to unveil victim compensation plan Monday
NEW YORK (CNNMoney) — General Motors consultant Kenneth Feinberg on Monday will unveil his long-awaited compensation plan for those who were killed or injured as a result of the automaker’s ignition switch recall problem.
GM has linked the issue to 13 deaths and 54 accidents, but industry experts believe the final numbers will be much higher.
The company hired Feinberg in April to decide how to award money to victims and their families. Monday will be the first time he discloses details about who will be eligible for compensation and how much they will receive.
It took more than a decade after some employees first learned of the problem for GM to recall the 2.6 million vehicles equipped with the faulty ignition switch.
The faulty switch allows the key to sometimes fall into the off or accessory position while someone is driving. This effectively shuts the car off, disabling power steering and the airbags.
Feinberg, an attorney, is considered a compensation expert. He devised similar plans after a number of high-profile tragedies including the 9/11 terrorist attacks, the Boston Marathon bombings, the Virginia Tech massacre and the BP oil spill.
In most of those cases, there was a pre-defined amount of money available for the compensation fund. The amount GM is setting aside could be unveiled Monday.
BP, for example, set aside $20 billion for victims after an oil rig explosion spilled 210 million gallons of oil into the Gulf of Mexico. Congress allocated $7 billion for 9/11 victims and the fund for those killed and injured by bombs at the Boston Marathon totaled $61 million, which came solely from donations.
We could also learn Monday about who will be eligible for compensation and how much money they might receive.
Feinberg could decide that the families of those who died all get the same amount of money. After the Boston Marathon bombing, they each got $2.2 million, while $208,000 was given to families of those who died at Virginia Tech.
On the other hand, the amount given to families who died on 9/11 depended on the victim’s earning potential. So a stock broker’s family would have received more than the family of a restaurant worker.
It would be surprising if Feinberg chose to calculate awards this way for GM victims, though. In his book, “Who Gets What,” Feinberg said this was a “critical flaw” of the 9/11 program that sometimes invoked anger among those who needed help.
Feinberg could also detail how much money goes to those who were injured in car crashes caused by the ignition switch defect. In the past, these awards have been based on the severity of the injury and the amount of time spent in the hospital.
He is expected to unveil his plan at 10 a.m. ET in Washington.