General Motors has hired attorney Kenneth Feinberg to advise it on its recall of small cars, but says his hiring doesn't necessarily mean it will establish a fund for victims, the Wall Street Journal reported.
GM CEO Mary Barra announced Feinberg's hiring during a House subcommittee hearing Tuesday, according to the WSJ.
Congress is investigating GM's recall of 2.6 million small cars for defective ignition switches, a problem linked to 13 deaths and dozens of accidents, the WSJ reported.
Barra said Feinberg will bring his extensive experience with compensation to the company, according to the WSJ. Feinberg, an expert in disaster fund management, handled the Sept. 11 Victim Compensation Fund as well as funds for victims of the Boston Marathon bombing and the BP oil spill.
Barra did not say GM will compensate victims or owners of the recalled cars, the WSJ reported. GM is under investigation and could face government penalties for its handling of the defect and recall.
Under terms of GM's 2009 bankruptcy, the company is shielded from liability for injuries that happened before the bankruptcy, according to the WSJ.
GM will have substantial costs for repairing cars with the faulty ignition switch and possibly liability for injuries that occurred after its bankruptcy, according to the WSJ.
She said GM will start meeting with Feinberg on Friday and will issue a decision in 30 to 60 days, the WSJ reported.
"We will make the best decisions for our customers, recognizing that we have legal obligations and responsibilities as well as moral obligations," Barra said, according to the WSJ.
GM has offered owners of the recalled cars $500 toward a new car, and is providing loaner vehicles while they are waiting for repairs, the WSJ reported. The company expects to begin those repairs this month.
GM has recalled 2.6 million vehicles due to the ignition-switch problems, mainly in Chevrolet Cobalts and Saturn Ions that the company made starting in 2004, according to the WSJ.
