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Old 09-12-2008, 07:52 PM   #1
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Default GM settles suit for faulty Saturn trans - GM states claims are "widely exaggerated"

GM settles lawsuit over faulty Saturn transmissions

Chrissie Thompson
Automotive News
September 12, 2008 - 12:01 am ET
UPDATED: 9/12/08 11:57 a.m. EDT

General Motors has settled a class-action lawsuit involving early transmission failures in the more than 90,000 Saturn vehicles carrying its VTi continuously variable transmission.

The settlement, which has preliminary approval from a federal judge, could cost GM more than $100 million, said Rob Schmeider, a plaintiffs' lawyer from the Lakin Law Firm of Wood River, Ill.

GM attorney Joe Lines called the plaintiffs lawyer's estimates "wildly exaggerated."

He said GM's costs will range between $10 million and $20 million.

The settlement applies to owners of 2002 to 2005 Saturn Vues or 2003 or 2004 Saturn Ions with failed VTi transmissions, which cost around $4,000 to $5,000 to replace, Schmeider said. The percentage of individual plaintiffs' expenses that will be paid depends on the mileage of the vehicle when the transmission failed, and whether owners purchased the vehicle new or used.

If the judge grants approval, all people listed on qualifying vehicle titles will receive claim forms for past and future expenses related to failure of the VTi transmission before vehicles reach 125,000 miles. The settlement applies to VTis that fail within eight years of the model year.

U.S. District Judge William B. Shubb has scheduled a hearing Feb. 17 in Sacramento, Calif., to weigh final approval of the settlement.

GM felt its defense could win the case, but knew the company faced a four-year legal battle and so decided to settle, Lines said.

"We just thought that it was best to put the customers first and have a program that, through this claims process, will hopefully satisfy customers and enhance customer satisfaction rather than spend four years and millions of dollars on lawyers and court fees," Lines said.

Lines declined to give a specific failure rate for the transmissions, saying the rate was "much higher than we liked" and varied depending on the cars' environments.

"The vehicles that were produced first did not operate as we intended," Lines said. "The ones that were produced at the end of the production run were much, much better."

The VTi transmission, which Saturn discontinued after 2005, uses a steel belt and adjustable pulleys to keep the engine running in its most efficient rpm range. GM touted it as 7 percent more fuel efficient than the automatic transmissions Saturn was producing at the time.

The transmission, designed by GM Powertrain, was made in an Adam Opel AG plant in Szentgotthard, Hungary.

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