GM seeks to contain fallout from pickup trial

Click to follow
The Independent Online
NEW YORK - General Motors, facing a dollars 500m recall of pick-up trucks and potential billions more in lost sales, moved yesterday to limit the fall-out from a dollars 105m ( pounds 75m) product liability award, writes Larry Black.

GM, which was found negligent in the design of the trucks' fuel tanks on Thursday, confirmed it would appeal against the verdict of the Atlanta jury, which blamed it for the death of a 17-year-old driver in 1989. GM also said it was suing a company that performed tests on the vehicles for an investigative television news programme.

The programme, Dateline, which was aired on the NBC network last November, brought national attention to the trial, demonstrating the tendency of the petrol tanks to explode on impact.

Despite claims by more than 100 other crash victims, GM has decided to resist a recall of the 5 million trucks it sold before it changed the tank design on the vehicles in 1988, and is instead awaiting the results of a separate inquiry by the US National Highway Safety Administration that began last December. And while large jury awards are often reduced or overturned upon appeal, some industry analysts warn of the effect such negative publicity will have on GM's sales as it tries to rebuild its image.

GM, which has lost dollars 16bn on its North American car-making business since 1990, is expected to declare a dollars 23.5bn loss for 1992 next week.

Comments