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Discussion Starter · #1 ·
LG to pay up to $1.9 billion to General Motors over Bolt EV battery fires
by Michael Wayland

LG Electronics has agreed to reimburse General Motors up to $1.9 billion to recall and fix Chevrolet Bolt electric vehicles due to fire risks caused by faulty batteries provided by the South Korean supplier.

Problems with the Bolt – the company’s flagship mainstream EV – have led the automaker to recall every one of the electric cars since production began in 2016. Fixing the vehicles, including completely replacing some batteries entirely, is expected to cost $2 billion, GM said Tuesday. That’s up from a previous estimate of $1.8 billion.

The settlement between the companies is a major win for the automaker, which missed Wall Street’s expectations in the second quarter due to setting aside money related to the expected recall costs.

[More at link above]
 

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Discussion Starter · #2 ·
Looks like GM managed to get LG to cover almost all of the expected cost of the recall.

That's definitely a major win for GM, and likely indicates GM didn't violate any LG guidelines on charging etc. that made the situation worse. To be honest, I'm pleasantly surprised by this. The battery makers are in a strong bargaining position at the moment as everyone is trying to secure battery capacity. Kudos to Mary B and the team for pulling that off.
 

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Definitely a win for GM. But the damages don't cover the harm to GM's reputation.
 

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Fantastic news GM gets to double up car sales with all the Bolt car replacements dating back to 2017.

Nice one Mary Barra, GM legal team are the best saves the day.
 

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Definitely a win for GM. But the damages don't cover the harm to GM's reputation.
I was thinking the same thing, go for it GM another 2 billion for damaging the reputation of GM.
 
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Correct - GM needs to make it clear this was an LG design problem not a GM problem.
This will require auto journalists (Edmonds, Autoblog, MT, etc.) pick up the story and report on it to get the word out.
 
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Definitely a win for GM. But the damages don't cover the harm to GM's reputation.
It's not the money itself (not that I would turn down $1.9 Billion). It's that LG has AGREED to pay, and publicly accept the blame. That goes a long way towards repairing GM's reputation.
 

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It's not the money itself (not that I would turn down $1.9 Billion). It's that LG has AGREED to pay, and publicly accept the blame. That goes a long way towards repairing GM's reputation.
Agreed.

I wonder what was in the agreement. LG may have provisions about how much public blame there is. GM really should have ads apologizing for the fires and problems, and make it very clear that it was an LG issue. However, they may not be able to do that.
 

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Discussion Starter · #10 ·
Agreed.

I wonder what was in the agreement. LG may have provisions about how much public blame there is. GM really should have ads apologizing for the fires and problems, and make it very clear that it was an LG issue. However, they may not be able to do that.
Absolutely NOT.

Don't draw any more attention to the problem. Apologize in private to the Bolt owners but move on from the issue as quietly and as quickly as possible. People have short memories, unless someone keeps reminding them. And GM does not want to be that someone.
 

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Absolutely NOT.

Don't draw any more attention to the problem. Apologize in private to the Bolt owners but move on from the issue as quietly and as quickly as possible. People have short memories, unless someone keeps reminding them. And GM does not want to be that someone.

Sometimes blame does need to be assigned.
 

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This makes sense to me as the batteries are from a plant that I assume is wholly owned and operated by LG. I wonder how the contracts are written with the JV's? Meaning if an Ultium battery made at the upcoming GM/LG plants I wonder if the cost of such a recall will be shared 50/50 or something else?

Now that most manufacturers are switching to the skateboard design, meaning more or less all of their vehicles will be the same, any recalls will be massive. And, what will happen if a battery design is determined to be unsafe and a fix takes a year to implement? Granted, that's a really bad scenario, but I don't think out of the realm of possibility (Boeing Dreamliner) - a car company might have to shut down all sales for a year and then have to shoulder the costs of a recall.
 

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It's not the money itself (not that I would turn down $1.9 Billion). It's that LG has AGREED to pay, and publicly accept the blame. That goes a long way towards repairing GM's reputation.
Who's making the new Ultium Batteries?
 

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I would assume that these type of arrangements are already defined in the supplier contract before any work starts. If GM was to come after LG after the fact for something not in their contract, this would have been a long drawn out process with lawyers in the courts. For LG to just agree to pay for everything essentially, it had to have come from an existing contract clause for defective part liability.

Also, it's bad taste and bad business for an OEM to throw a supplier under the bus if they're being cooperative and standing by their contract. In business agreements on this scale you don't want to burn bridges with large companies. You never know when you're going to need them again.
 
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Apologize in private to the Bolt owners but move on from the issue as quietly and as quickly as possible.
A brand new free battery would make me real frikkin happy.
 
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