Boston, MA 11/23/2014 (wallstreetpr) – General Motors Company (NYSE:GM)’s ignition switch debacle refuses to go away even as the automaker tries to compensate people who were affected by the long-running defect. New details are emerging that the automaker decided to stick with a supplier of the substandard ignition switch even after learning that the problem could not be fixed.
General Motors Intimidation Tactic
The ignition switch made by Delphi remains the center of attention after causing 33 deaths with a dozen other injuries. In revealed email conversation between GM and Delphi, the supplier claims he was pressurized by the giant automaker to continue manufacturing the defect `switch even though it did not meet the accepted standards.
The revelations are the first to be made public showing long-standing concerns between the supplier and the embattled automaker. The documents clearly indicate how General Motors persisted on the switches to be produced despite being deemed as faulty. A top official at Delphi, Thomas Svoboda, according to the accessed email claims that he was intimidated by an engineer at GM into accepting the switch’s faulty design.
Attempts to Fix the Problem
It has also been revealed that during the summer of 2005 two General Motors committees were pushing for a solution into the problem that the automaker failed to respond to. Tests carried by the General Motors employees on the test track had also revealed that changes were needed on the ignition switch design to prevent them from failing. The main concern during the testing stages was that if the switch was bumped into, it resulted in the shutting down of the engine consequently disabling key systems like power steering and airbags.
One of the lawyers representing accident victims as a result of the faulty ignition switch has already taken swipe of GM’s past culture that was based on intimidating suppliers. The emails also reveal that a number of employees had been involved in trying to fix the problem with three inquiries being carried out as to why the cars had problems related to stalling.
Technicals
Shares of General Motors Company (NYSE:GM) traded in a very narrow range of $0.58 cents in entire trading session on Friday. Though the stock is trading above its 20-Day EMA of $31.63 and with RSI standing at 56.86 which is in no man’s land and not moving anywhere indicates that the stock is looking for a direction in near term.
Going forward the stock has strong support near $31 and $29 whereas resistance near $33.5 and $34 zone. It would be interesting to see where the stock moves in Monday’s trading session after news of General Motors bullying Delphi came out over the weekend.
