AUTO INDUSTRY
Trial begins over GM ignition switches

General Motors should pay for concealing an ignition-switch defect from its customers that has been linked to nearly 400 injuries and deaths, an attorney for an Oklahoma man injured in a car crash told a Manhattan jury Tuesday.

“This case is not just about an accident that occurred in Oklahoma in 2014,” said Robert Hilliard, who is representing plaintiff Robert Scheuer. “This is about the conduct of a company over a period of time that spanned more than a decade.”

Key GM employees knew about the problem for more than 10 years, Hilliard said, adding that evidence would show the automaker’s “coverup” of a dangerous safety flaw.

His comments came in opening statements in the first trial since GM’s recall of 2.6 million vehicles, including Scheuer’s 2003 Saturn Ion, over an ignition switch that could inadvertently slip to an “off” or “accessory” position while the car was moving, stalling engines and disabling critical systems such as air bags.

Scheuer’s case, in which he is seeking unspecified compensatory damages as well as punitive damages, is the first of six that have been selected to serve as a “bellwether,” or test, trials in federal litigation over the switch.

GM has agreed to pay roughly $2 billion to resolve legal claims and probes in connection with the switch problem, which thrust the company into the hot seat with Congress, regulators, prosecutors and the public two years ago.

Although Scheuer followed GM’s instructions to remove all but a single key from his key ring, the ignition switch slipped to “off” during a May 2014 highway crash, Hilliard said. The air bags failed to deploy, and Scheuer suffered neck and back injuries.

While acknowledging “mistakes and errors in judgment made by GM employees” over the switch, GM’s lawyer, Mike Brock, said the switch was not to blame for Scheuer’s injuries.

— Reuters

INSURANCE
MetLife weighs sale or spinoff

MetLife, the largest U.S. life insurer, plans to separate much of its retail business as chief executive Steven Kandarian works to shrink the company to limit federal oversight.

The insurer is weighing a possible sale, spinoff or public offering of the operation, New York-based MetLife said in a statement Tuesday. The new company would have about $240 billion of assets and account for approximately 20 percent of MetLife’s operating earnings, according to the statement.

MetLife joins GE’s finance unit in seeking to simplify operations after being designated by a U.S. panel as a non-bank systemically important financial institution, a tag that can lead to stricter limits on the balance sheet.

The unit faces “higher capital requirements that could put it at a significant competitive disadvantage,” Kandarian said in the statement. “Even though we are appealing our SIFI designation in court and do not believe any part of MetLife is systemic, this risk of increased capital requirements contributed to our decision to pursue the separation of the business.”

MetLife said Executive Vice President Eric Steigerwalt will lead the new company.

— Bloomberg News

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