Home » Class Action Reporter » GENERAL MOTORS: Still Defending 9 Class Suits Over Takata Airbag

GENERAL MOTORS: Still Defending 9 Class Suits Over Takata Airbag

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General Motors Company said in its Form 10-K Report filed with the
Securities and Exchange Commission on February 7, 2017, for the
fiscal year ended December 31, 2016, that through January 27,
2017, the Company was aware of one putative class action pending
against GM in federal court in the U.S., one putative class action
in Mexico and seven putative class actions pending in various
Provincial Courts in Canada arising out of allegations that airbag
inflators manufactured by Takata are defective.

In addition, the New Mexico Attorney General has initiated
litigation against Takata and numerous automotive manufacturers,
including GM.

The Company said, “At this early stage of these proceedings, we
are unable to provide an evaluation of the likelihood that a loss
will be incurred or an estimate of the amounts or range of
possible loss.”

“On May 4, 2016 NHTSA issued an amended consent order requiring
Takata to file DIRs for previously unrecalled front airbag
inflators that contain an ammonium nitrate-based propellant
without a moisture absorbing desiccant on a multi-year, risk-based
schedule through 2019 impacting tens of millions of vehicles
produced by numerous automotive manufacturers. NHTSA concluded
that the likely root cause of the rupturing of the airbag
inflators is a function of time, temperature cycling and
environmental moisture. On May 16, 2016 Takata issued its first
DIR in connection with the amended consent order, and on January
3, 2017, Takata issued its second set of DIRs.

“Although we do not believe there is a safety defect at this time
in any GM vehicles within scope of the Takata DIR, in cooperation
with NHTSA we filed Preliminary DIRs on May 27, 2016, updated as
of June 13, 2016, covering 2.5 million of certain of our GMT900
vehicles, which are full-size pick-up trucks and SUVs. On November
15, 2016 we filed a petition for inconsequentiality and request
for deferral of determination regarding certain GMT900 vehicles
equipped with Takata inflators. On November 28, 2016 NHTSA granted
GM’s deferral request in connection with this petition. The
deferral provides GM until August 31, 2017 to present evidence and
analysis that our vehicles do not pose an unreasonable risk to
motor vehicle safety. We believe that this timeline will permit us
to complete our testing of the relevant non-desiccated Takata
inflators in GMT900 vehicles and to prove to NHTSA that the
inflators in these vehicles do not present an unreasonable risk to
safety and that no repair will ultimately be required.

“Takata filed a second set of equipment DIRs on January 3, 2017
and we filed a second set of Preliminary DIRs for certain GMT900
vehicles on January 10, 2017. These January 2017 DIRs are
consistent with GM’s May 2016 DIRs. On the same day, we also filed
a second petition for inconsequentiality and deferral of decision
with respect to the vehicles subject to our January 2017 DIRs. On
January 18, 2017, NHTSA consolidated our first and second
petitions for inconsequentiality and will rule on both at the same
time.

“We believe these vehicles are currently performing as designed
and ongoing testing continues to support the belief that the
vehicles’ unique design and integration mitigates against inflator
degradation. We believe that the results of further testing and
analysis will demonstrate that the vehicles do not present an
unreasonable risk to safety and that no repair will ultimately be
required. Accordingly, no warranty provision has been made for any
repair associated with our vehicles subject to the Preliminary
DIRs and amended consent order. However, in the event we are
ultimately obligated to repair the inflators in these vehicles, we
estimate a reasonably possible cost of up to $880 million for the
6.9 million vehicles subject to either the Preliminary DIRs or
future Takata DIRs under the amended consent order.”