General Motors chief executive Mary T. Barra addressed shareholders Tuesday, telling them at the company’s annual meeting in Detroit that doing right by the victims of a deadly ignition-switch flaw is also the right thing for investors.
Barra said that mediation specialist Kenneth R. Feinberg is well along in designing a victims’ compensation fund that should begin accepting claims by Aug. 1.
“The program he will administer underscores our commitment to do the right thing and treat accident victims and their families with compassion, decency and fairness,” Barra said.
GM has linked the faulty switch — which caused cars to stall, stiffening brakes and steering and disabling air bags — to 54 accidents and 13 deaths. But Barra acknowledged Tuesday that the tally could grow, according to news reports.
The ignition-switch flaw has led the company to recall 2.6 million Chevrolet Cobalts and other small cars, while triggering a long series of recalls that Barra said could continue for several weeks. GM has set aside $1.7 billion to cover the cost of the recalls.
The company was also fined $35 million by the National Highway Traffic Safety Administration. In addition, the company is facing a host of private lawsuits and government investigations, including a probe by federal prosecutors in New York that could result in fines of more than $1 billion.
Barra noted that 70 percent of the vehicles recalled by GM this year are no longer in production, a fact that has helped the company continue robust sales despite the recall problems.
In May, the company reported its best sales month in nearly six years. The company’s share price closed at $36.40 Tuesday, up nearly $1.80 since GM announced the first in a series of ignition-switch recalls Feb. 13.