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Judge OKs $19 Million Settlement in GM Faulty Transmission Case

February 12, 1987

CHICAGO (AP) _ A federal judge Wednesday approved a $19.5 million out-of-court settlement to reimburse nearly 5 million consumers for automatic-transmission repairs to 1976-1980 General Motors Corp. vehicles.

Under the 40-page agreement approved by U.S. District Judge John A. Nordberg, original owners of certain GM vehicles are to be notified by the automaker and reimbursed for as much as 90 percent of the cost of repairing the transmissions.

″It’s possibly the largest consumer class-action settlement of its kind and we’re hopeful that the people who have been out there who suffered problems with their cars will get some compensation,″ said attorney Abraham Goldman, who represented plaintiffs in the class-action lawsuit.

The settlement includes a $14.4 million repair fund, a $2.5 million reserve to cover any additional repair costs and $2.6 million in legal fees, Goldman said.

At issue were about 4.7 million Chevrolets, Pontiacs, Oldsmobiles, Buicks and Cadillac Sevilles equipped with GM’s Turbohydramatic-200 automatic transmissions.

The lawsuit, filed in March 1979, challenged GM’s use of the THM-200 transmission in cars that usually carried the larger, more durable and more costly THM-350.

The settlement was reached by attorneys for GM and the plaintiffs in July.

Nordberg indicated at a public hearing in October that he would approve it, Goldman said, but final approval was delayed while the judge determined attorneys’ fees.

David Hudgens, a spokesman for GM in Detroit, said the company had no formal statement on the settlement. He also said there was no admission of GM liability in the earlier tentative settlement.

The cash settlements will be based on actual out-of-pocket repair costs.

Under the settlement, minimum reimbursement for transmission repairs needed before 50,000 miles is 50 percent of the cost.

Owners of vehicles that needed repair before 24,000 miles are eligible for 90 percent of the repair costs.

Original owners whose vehicles were repaired after 50,000 miles, and used- car owners who paid for such repairs, can apply for reimbursement to the Better Business Bureau, which has worked with GM to set up a mediation and arbitration system, said another attorney for the plaintiffs, Charles A. Boyle.

Original owners who have previously received compensation, from sources such as the GM consumer arbitration program administered by the Better Business Bureau, can receive up to $75 under the settlement.

Claim forms will be sent to affected consumers within two months, Goldman said, and eligible consumers should begin receiving checks in six to nine months.

″If there is any money left over ... then that goes back to GM,″ Goldman said, although he added that ″the way the settlment is set up, all of the money should go to the consumers.″

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