GM wins its first ignition switch case


General Motors and the United Auto Workers union reached a tentative agreement on a new labor deal, the first since the federal bailout and bankruptcy at the company two years ago. The agreement was reached Friday, September 16, 2011 and covers about 48,500 UAW members at the nation’s largest automaker. GM said the new contract will allow it to be competitive by pegging compensation to company performance and demand.

FILE – GM’s plant in Orion Michigan is producing new Chevy Sonic’s which hit the market this Fall. It is the first subcompact to be built in the U.S. in decades. The plant is putting 15-hundred GM employees back to work after several years of lay-offs. It took a half-billion dollar investment from GM, and some major union concessions to make the plan feasible. Both GM management and the UAW are making a high stakes bet on the plant’s success.

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NEW YORK (CNNMoney) — General Motors won a victory in the first personal injury case to go to trial involving its faulty ignition switch amid charges of fraud.

But the case never even got to a jury because a witness came forward to contradict allegations made by the plaintiff, an Oklahoma postal worker named Robert Scheuer.

This case was expected to be a bellwether that would signal whether victims of GM’s faulty ignition switch could successfully sue GM instead of taking whatever settlement the automaker offered to them.

Scheuer sued GM in federal court charging that he was injured when his Chevrolet Cobalt hit a tree and the air bag did not deploy. He claimed he suffered from memory loss as a result of the accident. His wife testified that as a result of the memory loss, the couple lost their “dream house” because her husband misplaced a check they needed to buy the house.

But after the trial started in New York earlier this month, a realtor in Oklahoma contacted GM to say the couple actually lost the house because they had presented an altered check as proof of funds to buy the house. GM used that evidence to impeach Scheuer’s testimony, and Thursday he dropped the case.

“We had already started to show by strong, clear and convincing evidence to the jury that the ignition switch didn’t have anything to do with Mr Scheuer’s accident or injuries,” said GM’s statement. “The apparent lies the plaintiff and his wife told the jury ended the trial early, and we are pleased that the case is over without any payment whatsoever to the Mr. Scheuer.”

The turn of events was a bitter defeat for Robert Hilliard, Scheuer’s attorney, who has led the legal attack on GM in the ignition switch cases. He had hoped a win in this case would lay the ground work for other verdicts or settlements with GM. He said he would not be deterred by this loss in bringing those other cases.

“To have any trial end in such an unexpected and unforeseen way is disappointing, especially one such as this where the concerns regarding the underlying safety of certain GM’s vehicles are legitimate and real,” he said. “A jury’s decision regarding the existence of a defect will have to wait until the next trial.”

GM has admitted it was at fault in failing to recall more than a million cars with faulty ignition switches for about a decade after the problem was discovered. It set up a compensation fund that paid victims and their families nearly $600 million in damages. The fund certified that 124 people died as a result of the ignition switch and compensated another 275 with serious injuries. But some victims have pressed forward with their own lawsuits rather than accept the GM offer.

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