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GM Shares Relatively Quiet Following Month of 4.8M Recalls

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Shares of General Motors Company (NYSE: GM) are down nearly ten percent since early March when the Department of Justice officially got involved in the global ignition switch recall.

Shares are rather quiet on Monday following Friday's announcement that General Motors will add 971,000 cars to the recall.

In February, the automobile maker announced the ignition switch recall with 1.6 million vehicles, and linked to at least thirteen fatalities. The updated recalled vehicle number now totals approximately 2.6 million cars. This recall includes 2005-2007 Chevrolet Cobalt and Pontiac G5, 2003-2007 Saturn Ion, 2006-2007 Chevrolet HHR, 2005-2006 Pontiac Pursuit (Canada), 2006-2007 Pontiac Solstice and 2007 Saturn Sky.

The first ignition switch issue was first noted by General Motors in 2001. Although models made after 2007 had a redesigned ignition switch, the company reported that some of the cars may have been repaired with older "faulty" replacements.

On Friday, the company said that no deaths or injuries have been linked to faulty ignition switches in new models. Mary Barra, General Motors Chief executive, commented that "we are taking no chances with safety" in replacing the ignition switched on all recalled vehicles.

A General Motors spokesman announced on Thursday that the replacement ignition switch from Delphi will have a new part number that that "eliminates any potential confusion about which part to use in the repair."

Owners of the recalled vehicles will be notified by the week of April 21. The ignition switches will be replaced for free "as parts become available." The service correction time will be approximately 30 minutes. General Motors launched the website www.gmignitionupdate.com to provide consumers with safety and general information on the ignition switch recall.

With congress and regulators questioning why it took the company so long to address this issue, shares have continued to take a hit in March with a total of 4.8 million calls recalled this month. In addition to the ignition switch recall of 2.6 million vehicles, General Motors recalled 1.18 million SUVs as air bags and seat belt pretensioners may not deploy of drivers ignore an air bag warning light on the dashboard, 303,000 Chevrolet Express and GMC Savana vans as instrumental panel material may not protect heads of unbelted passengers, and 63,900 Cadillac XTS sedans due to a plug that can easily get dislodges and increase the risk of an engine compartment fire.

Shares of General Motors closed at $34.73 on Friday. The stock is currently trading at $34.52, down 0.608%.

 

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Posted-In: Department of Justice Mary Barra vehicle recallsNews Legal Management

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