WHEN: Today, Monday, February 2nd
WHERE: CNBC's "Squawk Box"
Following is the unofficial transcript of a FIRST ON CNBC interview with Ken Feinberg, administrator of the GM faulty ignition-switch compensation fund, on CNBC's "Squawk Box" today. Following is a link to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000351144/
All references must be sourced to CNBC.
JOE KERNEN: A KEY DEADLINE REACHED IN THE GENERAL MOTORS IGNITION RECALL SAGA AND OUR OWN PHIL LEBEAU JOINS US NOW WITH A SPECIAL GUEST. WE'RE GETTING SNOW. YOU HANDED IT OFF TO US, I THINK, PHIL.
PHIL LEBEAU: THANK YOU, JOE. WE ARE JOINED BY KEN FEINBERG WHO IS THE ADMINISTRATOR OF THE GM IGNITION-SWITCH VICTIM COMPENSATION FUND. THE DEADLINE WAS SATURDAY NIGHT AT MIDNIGHT. LET'S GO OVER THE FINAL NUMBERS BECAUSE YOU DID HAVE A RUSH OFPEOPLE AT THE END WHO SAID I THINK THAT I HAVE A CLAIM AGAINST GENERAL MOTORS. WHAT ARE THE FINAL NUMBERS?
KEN FEINBERG: WELL, SO FAR WE'RE STILL COUNTING THEM. THEY COME IN ALL OF THESE PROGRAMS AS YOU KNOW. YOU GET A RUSH AT THE END. SO WE'RE NOT – THE NUMBERS AREN'T YET FINAL, FINAL. WE'LL KNOW IN ABOUT TEN DAYS. BUT WE RECEIVED 4,180 CLAIMS. NOW, OF THE 4,180 CLAIMS THAT WE'VE RECEIVED, WE'VE ALREADY NOTED THAT ABOUT 3,000 OF THEM ARE EITHER INELIGIBLE, DEFICIENT, THEY SEND IN A PHOTO OR A POLICE REPORT THAT DOESN'T SAY VERY MUCH. OR NOTHING. ABOUT 1,500 CLAIMS HAVE NO DOCUMENTATION AT ALL. ON THE OTHER HAND, WE HAVE AUTHORIZED PAYMENT FOR 51 DEATHS AND ABOUT ANOTHER 70 OR SO PHYSICAL INJURIES.
LEBEAU: WHEN YOU LOOK AT HOW MUCH THIS IS GOING TO WIND UP COSTING GENERAL MOTORS, THEY ALLOCATED BETWEEN $400 AND $600 MILLION. I KNOW YOU'RE NOT SAYING EXACTLY HOW MUCH EACH OF THESE CLAIMS IS GETTING, BUT GENERALLY SPEAKING, WHEN YOU ADD IT UP, IS IT GOING TO BE IN THAT RANGE OF $400 MILLION TO $600 MILLION?
FEINBERG: WELL, AGAIN, WE'VE GOT TO STILL LOOK AT THIS INVENTORY OVER THE NEXT THREE TO FOUR MONTHS TO MAKE SOME FINAL DECISIONS. I SUGGEST THOSE QUESTIONS SHOULD BE DIRECTED AT GENERAL MOTORS. THEY'RE THE ONES WHO ARE CUTTING THE CHECKS, MAKING THE PAYMENTS. NO ELIGIBLE CLAIMANT HAS YET REJECTED THE MONEY THAT WE'VE OFFERED UNDER THIS PROGRAM.
LEBEAU: YOU'VE GOT 13 FAMILIES ORIGINALLY WERE CITED THAT GENERAL MOTORS HAS KNOWN ABOUT BASICALLY FROM THE GET GO THAT THESE FAMILIES WERE IN VEHICLES THAT WERE FAULTY, DEFECTIVE, YET THEY FOUGHT IT ALL ALONG. HAVE YOU AWARDED A CLAIM TO EACH OF THOSE 13 ORIGINAL FAMILIES? HAVE THEY ACCEPTED?
FEINBERG: AGAIN, WE'VE GOT TO BE CAREFUL ABOUT CONFIDENTIALITY, BUT I WOULD SAY THAT THOSE 13 HAVE BEEN PROCESSED UNDER THIS PROGRAM, YES.
LEBEAU: AND YOU'VE DONE THIS FOR A NUMBER OF DIFFERENT SITUATIONS. 9/11, BP. WHEN YOU LOOK AT THIS AND COMPARE THIS WITH THOSE SITUATIONS, WHAT'S BEEN THE BIGGEST DIFFERENCE? IN TERMS OF TALKING WITH THE VICTIMS BECAUSE I KNOW YOU DO TALK WITH THE VICTIMS AND THEIR FAMILIES. WHAT'S THE DIFFERENCE HERE VERSUS THOSE SITUATIONS?
FEINBERG: ONE HUGE DIFFERENCE. THE TIME THAT HAS EXPIRED SINCE THE ACCIDENT. WE'VE RECEIVED CLAIMS FROM ACCIDENTS THAT OCCURRED TEN YEARS OR MORE. IN BP, IN 9/11, WE WERE PROCESSING CLAIMS RELATIVELY SPEAKING IMMEDIATELY AFTER THE TRAGEDY. HERE WE'RE GOING BACK TO THE EARLY 2000s. AND IT'S VERY DIFFICULT AND COMPLEX TO RECONSTRUCT ACCIDENTS WITH CIRCUMSTANTIAL EVIDENCE AFTER SO MUCH TIME HAS EXPIRED. BUT GM FOUND 13. WE FOUND 51 SO FAR, DEATHS. BUT UNDER A VERY DIFFERENT STANDARD. GM WAS LOOKING AT THE DIRECT EVIDENCE OF THE ENGINEERING DEFECT. WE'RE LOOKING AT WHAT THE LAWYERS WOULD LOOK AT AND THE JUDGES, PROXIMATE CAUSE, CIRCUMSTANTIAL EVIDENCE. SO NATURALLY THERE WOULD BE MORE CLAIMS.
LEBEAU: WHEN THIS FUND WAS SET UP, YOU HELD A PRESS CONFERENCE. I WAS THERE. AND YOU SAID LOOK, THERE ARE GOING TO BE SOME PEOPLE WHO AT THE END OF THE DAY THEY WANT VENGEANCE. THEY WANT GM TO SCREAM, NO, I CAN'T TAKE ANYMORE. DID YOU EVER HAVE ANY PEOPLE WHO FILED INFORMATION WITH YOU AND YOU SAID THIS IS BASICALLY THE CLAIM THAT WE WOULD AWARD IF YOU ACCEPTED IT AND THEY SAID, NO. IT'S NOT JUST ABOUT THE MONEY. I WANT TO TAKE THEM TO COURT. DID YOU HAVE ANY FAMILY WHO IS SAID WE WILL TURN DOWN THE OFFER AND TAKE THEM TO COURT INSTEAD?
FEINBERG: NO. WE HAVEN'T HAD ONE – NOW, WE'VE HAD SOME VERY IRATE FAMILIES AND THAT GOES WITH THE TERRITORY, THE EMOTION SURROUNDING THESE ACCIDENTS AND THE LOST LOVED ONES. YOUNG KIDS DRIVING THEIR FIRST AUTOMOBILE. SO THE EMOTION IS VERY, VERY HIGH, BUT WE HAVEN'T YET HAD ONE ELIGIBLE CLAIMANT WHO WHEN WE MADE A – WHAT I THINK IS A RATHER GENEROUS OFFER, TURN DOWN THE MONEY. AND DON'T FORGET UNDER THIS PROGRAM WE ARE NOT LOOKING AT CONTRIBUTORY NEGLIGENCE AT ALL. SPEEDING, ALCOHOL, TEXTING, ALL IRRELEVANT. ALL WE'RE LOOKING AT UNLIKE A COURT, ALL WE'RE LOOKING AT WAS THEIR PROXIMATE CAUSE THAT THE SWITCH CAUSED THE ACCIDENT.
LEBEAU: WHEN YOU WRAP THIS ALL UP, WHAT ARE YOU LOOKING AT? TWO OR THREE MONTHS DOWN THE ROAD BY NOW WHEN YOU FINALLY SAY THAT'S IT. WE'VE RECEIVED ALL THE APPLICATIONS. WE'VE DONE AS MUCH INVESTIGATION AS POSSIBLE AND THESE ARE THE FINAL DECISIONS.
FEINBERG: YES. IT'S TOO LATE NOW TO FILE A CLAIM. THE FILING PERIOD IS OVER. IT WILL NOT BE EXTENDED.
LEBEAU: BUT YOUR WORK CONTINUES HERE.
FEINBERG: OH, WE'VE GOT THIS BACKLOGGED NOW AND EVERYBODY HAS TO BE TREATED FAIRLY IN THE SAME MANNER THAT WE TREATED PEOPLE OVER THE LAST SIX MONTHS. SO THIS WILL GO WELL INTO THE SPRING, MAYBE EVEN LONGER BEFORE WE CLEAR OUT ALL OF THE INVENTORY.
LEBEAU: YOU MADE A GOOD POINT. YOU HAD THIS RUSH HERE AT THE END. APPROXIMATELY 600 CLAIMS FILED WITHIN THE LAST TEN DAYS. IS THERE A FAIR AMOUNT OF "AMBULANCE CHASING" WHERE YOU GET PEOPLE WHO ARE SAYING I WANT COMPENSATION FOR A FAMILY PET, ET CETERA.
FEINBERG: WELL, WE HAD ONE LIKE THAT. BUT NO, I DON'T THINK THERE'S AMBULANCE CHASING. I THINK PEOPLE IN GOOD FAITH SAY TO THEMSELVES IF THERE'S A PROGRAM LIKE THIS, GENEROUS PAYMENTS, QUICKLY. 60, 90, 120 DAYS VERSUS YEARS IN THE COURTROOM. NO CONTRIBUTORY NEGLIGENCE, NO BANKRUPTCY BAR OF GM. I THINK PEOPLE SAY, WELL, WE MAY OR MAY NOT BE ABLE TO RECOVER COMPENSATION, BUT WHY NOT FILE A CLAIM. THE PROGRAM SEEMS TO BE INDEPENDENT AND FAIR SO WE'LL PROCESS THOSE CLAIMS.
LEBEAU: DID YOU TALK TO MARY BARRA THIS WEEKEND? DID YOU GIVE HER A REPORT?
FEINBERG: I HAVEN'T SPOKEN TO MARY BARRA IN MONTHS. GM MADE IT VERY CLEAR THAT THIS IS AN INDEPENDENT PROGRAM, THEY'RE NOT SECOND GUESSING. GM HAS NOT UNDER OUR AGREEMENT HAS NOT QUESTIONED OR REJECTED OR APPEALED. THEY HAVE NO RIGHT UNDER THE PROTOCOL. WHATEVER THE FACILITY DECIDES. GM HAS WILLINGLY GONE ALONG. THIS IS EXACTLY WHAT GM SAID THEY WOULD DO AND THEY ARE DOING IT, I MUST SAY.
LEBEAU: FINAL QUESTION FROM ME. WHEN YOU HAVE TALKED WITH THESE VICTIMS, CLEARLY THIS IS AN EMOTIONAL SITUATION. YOU MENTIONED THAT EMOTIONS ARE RUNNING HIGH. IN GENERAL, SUMMARIZE WHAT YOU HAVE HEARD BACK FROM THESE FAMILIES IN TERMS OF HOW THEY FEEL ABOUT GENERAL MOTORS.
FEINBERG: YOU DON'T HEAR MUCH ABOUT – YOU HEAR SOME CRITICISM OF GENERAL MOTORS FOR NOT DISCLOSING THESE PROBLEMS EARLIER, WHAT HAVE YOU. MOST OF THE FAMILIES, AND I'VE SEEN THIS IN 9/11 AND YOU KNOW FROM BP, MOST OF THE FAMILIES, MOST OF THE PHYSICALLY INJURED VICTIMS LAMENT THEIR PLIGHT. IT'S NOT SO MUCH GM THEY FOCUS ON. THERE'S SOME OF THAT. BUT MOST OF THEM ARE EMOTIONALLY DISTRAUGHT OVER LIFE'S UNFAIRNESS.
LEBEAU: LOSING A LOVED ONE OR A LOVED ONE BEING CATASTROPHICALLY INJURED.
FEINBERG: EXACTLY. MR. FEINBERG, WHY ME? WHY DID I LOSE MY DAUGHTER? 17 YEARS OLD, 19 YEARS OLD. SHE HAD THE WORLD AHEAD OF HER. THERE IS NO GOD, MR. FEINBERG. THERE IS NO FAIRNESS IN THIS WORLD. IT'S NOT SO MUCH WHY IT HAPPENED, BUT THAT IT HAPPENED AND NOW THEY'RE BEREFT AND UPSET.
LEBEAU: KEN FEINBERG JOINING US FIRST ON CNBC GOING OVER THE FINAL APPLICATION NUMBERS. BUT AGAIN GUYS, THAT 4,180 IN TERMS OF APPLICATIONS, THEY'RE STILL PROCESSING THESE FOR THE NEXT COUPLE OF MONTHS AND MAYBE A COUPLE OF MONTHS DOWN THE ROAD WE COULD SEE THE FINAL DEATH CLAIM NUMBER WHICH IS AT 51 GO A LITTLE BIT HIGHER FROM HERE.
FEINBERG: OH, I THINK SO. I THINK SO.
LEBEAU: GUYS, BACK TO YOU.
BECKY QUICK: HEY PHIL, I DO HAVE ONE QUESTION. I SHOULD KNOW THE ANSWER TO THIS AND I DON'T. IF SOMEONE HASN'T MET THAT DEADLINE, KEN JUST MADE IT VERY CLEAR THAT DEADLINE'S NOT EXTENDED. DO THEY THEN HAVE THE OPTION OF TAKING THIS TO THE COURTS?
FEINBERG: ABSOLUTELY. IN FACT, EVEN IF YOU FILED A CLAIM, WE HAVEN'T HAD ANY YET WHERE PEOPLE REJECTED THE AMOUNT THAT WE'VE OFFERED, BUT IF A CLAIMANT FILES A CLAIM OR MISSED THE DEADLINE, THEY ALWAYS HAVE THE VOLUNTARY OPTION OF FILING A LAWSUIT AGAINST GENERAL MOTORS.
LEBEAU: BUT WE SHOULD POINT OUT, BECKY, YOU THEN ARE RUNNING THE LEGAL QUESTION THAT'S BEEN OUT THERE ALL ALONG WHICH IS GENERAL MOTORS WAS GIVEN A BANKRUPTCY SHIELD ONCE IT FILED FOR BANKRUPTCY. SO IF YOU HAD AN ACCIDENT THAT OCCURRED BEFORE THEY WENT INTO BANKRUPTCY AND CAME OUT OF BANKRUPTCY, THEN IT'S GOING TO BE A QUESTION WHETHER OR NOT THE COURT WOULD HONOR IT. THE COURT MIGHT SIT THERE AND SAY –
QUICK: ALTHOUGH, THAT MIGHT BE A PUBLIC RELATIONS NIGHTMARE IF GM ACTUALLY TOOK THAT SHIELD AND APPLIED IT.
LEBEAU: WELL I THINK GENERAL MOTORS – THE ARGUMENT BECKY WOULD BE LOOK, WE'VE MADE A GOOD FAITH EFFORT WITH THIS FUND HERE. YOU HAD A CHANCE HERE. YOU MADE A CONSCIOUS DECISION TO FIGHT US. LEGALLY WE'RE GOING TO FIGHT BACK. I THINK THAT IS ONE THAT I THINK GENERAL MOTORS WOULD BE COMFORTABLE TAKING ON.
QUICK: KEN, DO YOU HAVE ANY IDEA HOW MANY CASES MIGHT STILL BE OUT THERE? PEOPLE WHO OPTED NOT TO TAKE IT OR IS THERE JUST NO WAY OF MEASURING THAT?
FEINBERG: THERE'S NO WAY OF MEASURING IT, BUT I MUST SAY AFTER SIX MONTHS WITH THE PUBLICITY AND THE NEWS AROUND THE COUNTRY ABOUT THIS PROGRAM, I MUST SAY I'M DUBIOUS THAT ANYBODY OUT THERE DOESN'T KNOW ABOUT THIS PROGRAM AND WOULD HAVE FILED A CLAIM. I THINK IF WE WON'T PAY A CLAIM, I'M HARD PRESSED TO THINK THAT THE COURTS WILL HONOR SUCH A CLAIM.
SORKIN: ALL RIGHT. OUR THANKS TO KEN FEINBERG. WE APPRECIATE YOU BEING WITH US THIS MORNING. AND OF COURSE PHIL LeBEAU FOR BRINGING US THAT GREAT INTERVIEW.
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