General Motors to face class action over claims it hid defects

General Motors is facing a class action lawsuit over allegations it knowingly sold over half a million vehicles with defective transmissions and concealed the issue from consumers.

Driving the news: A federal court ordered General Motors to face the accusations in court after the automaker appealed to avoid litigation. The lawsuit was originally certified by a Detroit Judge in early 2023.

• This means that plaintiffs’ lawyers can now launch a class action suit against the company in a lower court.

• The case centers around Cadillac, Chevy, and GMC models built between 2015 and 2019 with 8L90 or 8L45 eight-speed automatic transmissions. According to owners, higher gears caused shaking, while lower gears made the vehicle lurch forward.

• The plaintiffs also accused the manufacturer of encouraging dealers to placate consumers by telling them the issues were normal.

Zooming in: Roughly 514,000 vehicles are represented by the class action lawsuit. While General Motors tried to argue drivers lacked standing to sue, the court disagreed with the company’s stance.

• The automaker’s lawyers argued that most of the drivers who qualified for the lawsuit lacked standing since they hadn’t experienced issues.

• They also said the problems that did happen were too unique to necessitate a class action.

• However, Judge Karen Nelson Moore noted the number of plaintiffs with legitimate concerns did not affect whether the brand had hidden defects from the public.

• Moore also noted that those who overpaid for a car with an allegedly defective transmission would have standing, regardless of whether they experienced an issue.

What we’re watching: While General Motors has failed at its attempts to avoid the case, it’ll be interesting to see what evidence will be presented in court. If found guilty, the price could be steep. Earlier this year, Hyundai and Kia settled a class action suit for $200 million over a rash of car thefts impacting certain models with known vulnerabilities.

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