Trouble Ahead For GM?

The new year was meant to usher in a clean slate for General Motors Company GM, as the company prepared to leave its ignition switch crisis firmly in the rearview mirror.

CEO Mary Barra has done a great job regaining public trust and convincing customers that the auto-maker has revamped its corporate culture in order to avoid similar mistakes going forward; however, news that the company has been unsuccessful in preventing the first of six bellwether cases regarding the ignition switch problems from proceeding, suggesting that 2016 could be marred with the same negative press that 2015 saw.

Testing The Waters

Last week, according to Reuters, a judge Jim Lebenthal Is Bullish On GM And Ford

A Burden On General Motors

Not only will reopening this matter expose the public to more negative press regarding General Motors' involvement in car accidents that killed or injured hundreds of people, but it could bring about major financial costs to the company as well.

The result of this case will determine whether plaintiffs in similar situations should join together and demand a large-scale resolution. Six similar bellwether cases are set to take place in the coming year, with the last scheduled between mid-November and early December.

Financial Costs

General Motors has already set up a $625 million fund in order to compensate those who were directly affected by the ignition switch defect. So far, some 399 claims have collected $595 from the fund already, but certain cases, like the six coming up this year, do not qualify. The rulings of this year's cases could have a major impact on General Motors, as rulings that determine that other defects, like faulty airbags, were linked to the ignition switch issue will open the door for large-scale lawsuits.