Settlement in GM Side-Mounted Gas Tank Law Suit

12/31/96

Reuters reports that the Wall Street Journal published an article saying that a Louisiana Judge approved a settlement in a three year old class action suit concerning the dangers of side-mounted gas tanks on General Motors' C/K pickup trucks. The settlement calls for GM to give coupons worth $1,000 to as many as 5.8 million C/K pickup truck owners. The coupons can be used to buy GM products and are transferrable, but depreciate over time or if transferred.

GM fabricated the dangerous C/K pickups between the model years 1973-1987. The trucks' side-mounted fuel tanks make them unsafe in some types of collisions.

The settlement also requires GM to pay nearly $28 million in attorney fees and expenses. GM is reportedly considering appealing the bill for attorney fees. GM spokesman Ed Lechtzin said, "we're evaluating the judge's order, and considering an appeal of only the attorney fees, not the ruling concerning the certificates."

A group of plaintiffs unhappy with the settlement may also challenge it. Lechtzin said any such action by that group would have nothing to do with GM's potential appeal.

Commenting on the timetable for GM's issuance of the coupons, Lechtzin said that the schedule was still unclear: "If there's no appeal (by the dissident plaintiffs or by GM), the court order would take effect within 70 days. We would then notify truck owners and they would have to provide proof of ownership (of the affected vehicles) as of July 4, 1996."

Some of the trucks involved in the settlement are 23 years old, and GM hopes to reap sales benefits by issuing coupons to owners of the older pickups.

Paul Dever -- The Auto Channel