GM Hit With Lawsuit Over Rigged Diesel Emissions

Paul Ausick

About 18 months ago, Volkswagen was hit with allegations of using a device in its diesel-powered cars that could skate around diesel emissions regulations. The latest automaker to get called for using a similar device is General Motors Co. (NYSE: GM).

The U.S. automaker was named in a class-action lawsuit filed Thursday accusing GM of installing the so-called defeat devices on more than 700,000 of the company’s Chevy Silverado and GMC Sierra Duramax diesel-powered pickups built between 2011 and 2016. According to Hagens Berman, the law firm that filed the suit, the trucks emit between two and five times the legal limit of nitrogen oxide pollutants.

Since VW was found to be installing the defeat devices in its cars, the German company has paid more than $24 billion in fines, penalties and potential buybacks in North America. Fewer than 500,000 North American diesel-powered cars were affected however. Worldwide, the VW scandal involves some 11 million vehicles.

In the press release announcing the lawsuit, Hagens Berman said that despite claims by GM engineers that they had achieved a “remarkable reduction of diesel emissions,” later on-road testing showed that the trucks “pollute at levels well beyond legal limits, many times higher than their gasoline counterparts, and far in excess of what reasonable consumers would expect.”

A GM spokesman told Bloomberg News that the lawsuit is without merit.

Other top carmakers, including Fiat Chrysler Automobiles N.V. (NYSE: FCAU), Daimler, Renault, and PSA Group are also being investigated for the diesel emissions claims.

GM stock traded down nearly 2% shortly after the noon hour, at $32.52 in a 52-week range of $27.34 to $38.55. The stock’s price target is $40.32, according to MarketWatch analysts.