GM slapped with $10bn suit for losses on 27m recalls

General Motors was hit with its biggest lawsuit so far over serial recalls, brought on behalf of drivers of 27 million vehicles seeking more than $10bn in compensation for fallen car prices.

The would-be class action against GM seeks to represent owners who bought or leased a recalled car from July 2009 to July 2014 — and still have it, or sold it after mid-February when the recalls started, or had an accident that destroyed it after that date. More than 20 million customers could join the suit, said Steve Berman, one of the plaintiffs’ lawyers.

Detroit-based GM spurred the price drops by hiding at least 60 serious defects in around 27 million vehicles sold in the US, according to the complaint filed in federal court in Manhattan against ‘New GM’, as the carmaker became known after its 2009 bankruptcy and government bailout.

“The value of all GM-branded vehicles has diminished as a result of the widespread publication of those defects and New GM’s corporate culture of ignoring and concealing safety defects,” it said.

Hundreds of individual car-price complaints against GM were combined in two separate class actions, according to Berman, of Hagens Berman Sobol Shapiro LLP. The larger suit concerns cars made after the bankruptcy.

A smaller one, focused on ignition-switch faults in cars made before the bailout, may be curtailed by a bankruptcy judge’s ruling next year on whether older claims for accidents and economic losses are allowed. GM has asked the judge to rule that his earlier orders, which enabled the US to rescue the stumbling company, bar most of the claims over old cars.

According to the suits, 2010 and 2011 Chevy Camaros lost $2,000 in value as a result of recalls. The price drop of the 2009 Pontiac Solstice is $2,900.

GM said it would “vigorously defend against plaintiffs’ claims that GM vehicles have reduced resale value.”